A Producer Is Hiring 20 Units of Labor and 6

Multiple Choice

A producer is hiring 20 units of labor and 6 units of capital bundle A) .The price of labor is $10,the price of capital is $2,and at A,the marginal products of labor and capital are both equal to 20.Beginning at A,if the producer increases labor by one unit and decreases capital by 1 unit,then

A) cost remains constant and output increases by 20 units.
B) cost remains constant and output decreases by 20 units.
C) output remains constant and cost increases by $8.
D) output remains constant and cost decreases by $8.
E) both cost and output remain constant.