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Multiple Choice

A firm produces 100 widgets and is currently using 'Technology A'. The firm is considering four different production technologies, each with different requirements for labor and capital, as shown in the table below. Initially, the wage for a worker is $10, and the rental cost of capital is $40. Suddenly, the wage for a worker increases to $30, while the cost of capital remains unchanged. Based on this change, what is the most profitable action for the firm to take?

TechnologyNumber of WorkersUnits of Capital
A102
B63
C47
D210

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Updated 2025-08-05

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