If a firm’s production function is Leontief and the price of capital goes down the

Managerial Economics

If a firm’s production function is Leontief and the price of capital goes down the

Firm must use less labor in order to minimize the cost of producing a given level of output
Firm must use more capital in order to minimize the cost of producing a given level of output
Firm must use less capital in order to minimize the cost of producing a given level of output
Cost minimizing combination of capital and labor does not change

If a firm's production function is Leontief and the price of capital goes down the cost minimizing combination of capital and labor does not change.

Tags: The Production Process and Costs