Suppose a firm follows the cost minimization rule in choosing the amount of labor and capital to use in producing the product. When the marginal product of labor is 600, the marginal product of capital is 1000, the wage of labor is w=30 euros and the rent of capital is r=100 euros, the firm should:
A. Employ more capital and more labor.
B. Employ less capital and more labor
C. Employ more capital and less labor.
D. Not change the existing allocation of capital and labor.

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Answer is D An increase in the demand for Greek coffee followed by an increase in the quantit... View the full answer