In a manufacturing plant, if the MRTS between labor and capital is 3, what does this imply about substituting labor for capital?

• A. Labor and capital cannot be substituted.
• B. Labor and capital are perfect substitutes.
• C. Three units of labor can replace one unit of capital while maintaining the same output.
• D. One unit of labor can replace three units of capital while maintaining the same output.

Answer: (C)