The Equilibrium Price of Capital

Multiple Choice

The equilibrium price of capital

A) is not affected by a government subsidy on the rental of capital by firms.
B) decreases if the government subsidizes the rental of capital by firms because the demand curve for capital shifts to the left.
C) increases if the government subsidizes the rental of capital by firms because the demand curve for capital shifts to the right.
D) increases if the government subsidizes the rental of capital by firms because the supply curve for capital shifts to the left.
E) decreases if the government subsidizes the rental of capital by firms because the supply curve for capital shifts to the right.