A firm is currently using two inputs: labor and capital. It rents equipment for $1,000, which produces a value of the marginal product of $5,000. It hires workers at $10 per hour, who produce a value of the marginal product of $100. The wages of workers rise by 20% and the rental price of capital increases by 25%. The firm should hire ________ labor and ________ capital.

Select one:

a.more; more

b.more; less

c.the same amount of; the same amount of

d.less; more

e.less; less