Amy manages a steel manufacturing plant that produces steel rods. He has a contract

to produce 500 steel rods for a client this week and is deciding between three methods of production that use different amounts of inputs.

Production method Units of labor Units of capital

A 200 50

B 150 60

C 120 80

The price per unit of labor is $25 and the price per unit of capital is $100.

(a)Which production method should Darryl use?

(b)Draw the manufacturing plant's isoquant for producing 500 steel rods.