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Refer to the Following Graph

Question 42

Multiple Choice

Refer to the following graph.The price of capital (r) is $20. Refer to the following graph.The price of capital (r) is $20. Why wouldn't the firm choose to produce 5,000 units of output with the combination at B? A) At B,MRTS < 3/2. B) At B,MP<sub>K</sub> / r > MP<sub>L </sub>/ w. C) At B,MP<sub>L</sub> < MP<sub>K</sub>. D) both a and b E) none of the above Why wouldn't the firm choose to produce 5,000 units of output with the combination at B?


A) At B,MRTS < 3/2.
B) At B,MPK / r > MPL / w.
C) At B,MPL < MPK.
D) both a and b
E) none of the above

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