A firm operating in a perfectly competitive industry uses two factors of production, X and Y. The table lists the factor price and the current marginal physical product for each of these factors. factor X has a price of $2.50, MPP 2; factor Y has a price of $6.00, MPP 8. If the firm sells its product at $1 and wants to maximise profits, what should it do?
- Aemploy less of both X and Y
- Bemploy less of X and more of Y
- Cemploy more of both X and Y
- Demploy more of X and less of Y