In the context of Euler's Theorem and a production function that is homogeneous of degree one, if the marginal product of labor and marginal product of capital are both decreasing, which one of the following scenarios is most likely to be true?

 

(A) The firm should decrease both labor and capital to maximize output.

(B) The firm should increase both labor and capital to maximize output.

(C) The firm should adjust inputs of labor and capital according to the rate of decrease in their marginal products.

(D) Total output is bound to decrease due to diminishing marginal productivity.

(E) MP of labor and MP of capital determine the inputs required for production.