Suppose That Capital Costs $6 Per Unit and Labour Costs

question 65

Multiple Choice

Suppose that capital costs $6 per unit and labour costs $3 per unit.If the marginal product of capital is 12 and the marginal product of labour is 6,the cost-minimizing firm should

• A)employ more of both capital and labour.
• B)employ less of both capital and labour.
• C)employ more capital and less labour.
• D)employ less capital and more labour.
• E)not change its current factor use.

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