A cost-minimising firm produces output (q) using capital (K) and labour (L) with the produc- tion technology q = F(K, L). At the current level of output, the marginal product of labour is 4 and the marginal product of capital is 5. Suppose the isoquants are drawn with capital on the vertical axis. The firm pays $10 per unit of labour and $8 per unit of capital. In order to minimise the cost of producing the current output level, the firm should:
a) not change its input mix because the current input mix already minimises costs.
b) increase K and reduce L.
c) increase L and reduce K.
d) reduce both K and L.
e) increase both K and L.
