Asked by
mounika pathireddy
on Nov 16, 2024
Verified
Consider the market for capital equipment. Suppose the value of the marginal product of capital equipment increases. Holding all else constant, the equilibrium rental price of capital equipment will
A) increase.
B) decrease.
C) not change.
D) not be able to be determined without more information.
Marginal Product
The additional output produced by employing one more unit of a particular input, holding other inputs constant.
Rental Price
The cost associated with leasing or renting an asset, property, or service.
Capital Equipment
Long-term assets a business uses in the production of goods and services, such as machinery, buildings, and vehicles.
- Acquire knowledge about the concept of the demand curve for capital and how it illustrates the marginal productivity of capital.
- Analyze the impact of external events on the equilibrium price and quantity in various markets.
Verified Answer
VC
Learning Objectives
- Acquire knowledge about the concept of the demand curve for capital and how it illustrates the marginal productivity of capital.
- Analyze the impact of external events on the equilibrium price and quantity in various markets.