A Profit- Maximizing Firm Will Increase Its Use of Capital

Multiple Choice

A profit- maximizing firm will increase its use of capital and decrease its use of labour when the

A) average product of capital is higher than the average product of labour.
B) total product of capital is higher than the total product of labour.
C) marginal product of capital, per dollar spent on capital, is less than the marginal product of labour, per dollar spent on labour.
D) marginal product of capital, per dollar spent on capital, is greater than the marginal product of labour, per dollar spent on labour.
E) marginal product of capital is higher than the marginal product of labour.