You were recently hired to replace the manager of the Roller Division at a major conveyor-manufacturing firm, despite the manager's strong external sales record. Roller manufacturing is relatively simple, requiring only labor and a machine that cuts and crimps rollers. As you begin reviewing the company's production information, you learn that labor is paid $15 per hour and the last worker hired produced 90 rollers per hour. The company rents roller cutters and crimping machines for $17 per hour, and the marginal product of capital is 90rollers per hour.

Should you change the mix of capital and labor, and if so, how should it change?

multiple choice

• You should increase labor and decrease capital.
• You should not change the mix of capital and labor.
• You should increase capital and decrease labor.