Afirm uses 80 hours of labor and 6 units of capital to produce 10,000 gadgets per day. labor's marginal product is 4 gadgets per hour and the marginal product of capital is 20 gadgets per unit. each unit of labor costs $8 per hour and each unit of capital costs $50 per unit. if the firm wants to continue producing 10,000 gadgets per day at the lowest possible cost, it should a. use less of both inputs. b. use more labor and less capital. c. use more capital and less labor. d. continue using 80 hours of labor and 6 units of capital.

You are the owner of a local honda dealership. unlike other dealerships in the area, you take pride in your “no haggle” sales policy. last year, your dealership earned record profits of $1.5 million. however, according to the local chamber of commerce, your earnings were 10 percent less than either of your competitors. in your market, the price elasticity of demand for midsized honda automobiles is 4.5. in each of the last five years, your dealership has sold more midsized automobiles than any other honda dealership in the nation. this entitled your dealership to an additional 30 percent off the manufacturer’s suggested retail price (msrp) in each year. taking this into account, your marginal cost of a midsized automobile is $11,000. what price should you charge for a midsized automobile if you expect to maintain your record sales?