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what is the correct answer? 14. A firm uses labour (L) and capital (K) to produce software. Let labour be on the horizontal axis and

what is the correct answer?

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14. A firm uses labour (L) and capital (K) to produce software. Let labour be on the horizontal axis and capital on the vertical axis. The wage rate is w = 14 and the rental rate is r = 7. Which of the following is correct? A. At its optimal input bundle, the firm will be able to substitute 2 units of labour with one unit of capitaland keep output unchanged. B. If wage rate and the rental rate both double, the isocost line will shift upwards/outwards. C. The equation of the firm's family of isocost lines can be written as K = - -21. C_1 1 D. The equation of the firm's family of isocost lines can be written as K= 7 2 E. None of the above is correct

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