Refer to the information provided in Table 8.1 below to answer the question(s) that follow.
Refer to Table 8.1. Assuming the price of labor (
L) is $5 per unit and the price of capital (
K) is $10 per unit, which of the following statements is
true?
◦ The firm will use production technique A to produce all three units of output.
◦ The firm will use production technique B to produce all three units of output.
◦ The firm will use production technique B to produce the first two units of output and production technique A to produce the third unit of output.
◦ The firm will use production technique A to produce the first unit and production technique B to produce the second and third units of output.
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