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7. (1.5 points) Suppose you manage a firm whose marginal product of capital is currently 26 and whose marginal product of labor is currently
7. (1.5 points) Suppose you manage a firm whose marginal product of capital is currently 26 and whose marginal product of labor is currently 15. The rental price of capital is 7, and the wage is 8. A. If you want to expand output, should you increase capital or labor? Explain. B. If you do what is in part B, which of your numbers are likely to change? C. As this process unfolds, what equation will become true?
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