Suppose a Firm Hires Both Labor (L) and Capital (C)

Multiple Choice

Suppose a firm hires both labor (L) and capital (C) under purely competitive conditions. The price of labor is P_L, and that of capital is P_C. The marginal product of labor is MP_L, and that of capital is MP_C. The firm sells its product competitively at a price of P_X. In competitive labor markets, the marginal cost of an additional unit of labor

A) is equal to P_L × MP_L.
B) is equal to MP_L/P_L.
C) is equal tp P_L
D) cannot be determined from the information given.