Use the Following to Answer Questions

question 111

Multiple Choice

Use the following to answer questions :
Exhibit: Rental Price of Capital
-(Exhibit: Rental Price of Capital) Based on the graph, if the capital market is initially in equilibrium at A with real rental price R₃/P and capital stock K₂, then holding other factors constant, an increase in the capital stock to K₃ will change the real rental price of capital to:

• A) R₁/P.
• B) R₂/P.
• C) R₄/P.
• D) R₅/P.

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