A bottling company uses two inputs to produce bottles soft drink sludge: bottlingmachines(K) and workers(L). The machine costs $1000 per day (r) to run and the workers are paid $200per day (w). At the current level of production, the marginal product of the machine is anadditional 200 bottles per day (MPK), and the marginal product of labor is 50 bottles per day(MPL).

a. State the rule for determining the cos- efficient combinations of inputs (K & L)for theproduction ofsoft drinks.

b. Given r=$1000 per day, w=$200 per day, (MPK)= 200 bottles, and (MPL)= 50 bottles, is thecompany operating cost efficiently?

c. What must the company do to move toward cost efficient operation? Hint: use more labor ormore machines and why