If a Firm Is Using Labour and Capital Such That

Multiple Choice

If a firm is using labour and capital such that the MP of labour is two times the MP of capital,and the price of labour is four times the price of capital,the firm should ________ in order to minimize its costs of producing its output.

A) increase capital and decrease labour
B) decrease both capital and labour
C) decrease capital and increase labour
D) increase both labour and capital
E) not alter its present factor mix