A manager hires labor and rents capital equipment in a very competitive market. Currently the wage rate is $8 per hour and capital is rented at $12 per hour. If the marginal product of labor is 50 units of output per hour and the marginal product of capital is 65 units of output per hour, should the firm increase, decrease, or leave unchangedthe amount of capital used in its production process?

multiple choice

• The firm should decrease capital.
• The firm should leave capital unchanged.
• The firm should increase capital.