Your firm must produce a specified output level. The firm uses capital and labor as inputs. If the price of capital is $40, the price of labor is $100, the marginal product of capital is 20, and the marginal product of labor is 40, then:
- the firm is minimizing its total cost.
- the firm is maximizing profit but not minimizing total cost.
- the firm should use less labor and more capital to minimize total cost.
- the firm should use more labor and less capital to minimize total cost.