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A firm uses capital (K) and labour (L) to produce its output, according to the production function

In the current period (right now), the firm is using 3,125 units of labour service and producing 1,600 units of output.

If it reduces its use of capital by one unit, how much more labour will it need in order to produce 1,600 units of output in the next period?

Options:

1) Fewer than 3 more units of labour

2) At least 20 more units of labour

3) At least 3 more units of labour, but fewer than 5 more units of labour

4) At least 5 more units of labour but fewer than 10 more units of labour

5) At least 10 more units of labour but fewer than 20 more units of labour

Business Management, Management Studies

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