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Assume a competitive firm faces a fixed wage rate of $4 and a fixed price per unit of capital of $2. If the marginal physical

Assume a competitive firm faces a fixed wage rate of $4 and a fixed price per unit of capital of $2. If the marginal physical products of labour and capital are 16 and 6, respectively, then to maximize profits the firm should

Select one:

a.use relatively more capital.

b.use relatively less capital.

c.increase all inputs proportionately.

d.decrease all inputs proportionately.

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