optimal combination of capital and labor
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A producer is hiring 20 units of labor and 6 units of capital (Bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. The producer is
a. using the optimal combination of capital and labor
b. should use more capital and less labor
c. should use more labor and less capital
d. cannot determine without more information
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