A Competitive Firm Uses Two Inputs: Capital and Labor

Multiple Choice

A competitive firm uses two inputs: capital and labor.At its current level of hiring of both inputs,capital's marginal product is 12 while labor's marginal product is 18.Capital's cost (C) is $8 per unit while labor's cost (W) is $9.In the long run,to produce the same output at a lower cost,the firm should

A) hire more labor and less capital.
B) hire less labor and less capital.
C) hire more labor and more capital.
D) hire less labor and more capital.