All Quiet on the Western Bundt is a bakery specializing in the production of
bundt cakes using a combination of labor and capital.
If the firm increases its capital and decreases its labor and produces the
same amount of bundt cakes, what happens to the marginal product of
capital ($MP_K$) and the marginal product of labor ($MP_L$)?
Choose 1 answer:
A $MP_K$ increases; $MP_L$ doesn't change
B $MP_K$ decreases; $MP_L$ doesn't change
C $MP_K$ doesn't change; $MP_L$ decreases
D $MP_K$ increases; $MP_L$ decreases
E $MP_K$ decreases; $MP_L$ increases