You are an efficiency expert hired by a manufacturing firm that uses K and L as inputs. The firm produces and sells a given output. If w = $40, r = $100, MP_L= 20, and MP_K= 40 the firm:

• should use more L and less K to cost minimize.
• should use less L and more K to cost minimize.
• is profit maximizing but not cost minimizing.
• is cost minimizing.