If the Interest Rate at Which a Firm Can Borrow

Multiple Choice

If the interest rate at which a firm can borrow or lend is 10 percent, then the firm will own

A) all units of capital with a marginal revenue product below 10 percent.
B) all units of capital with a marginal revenue product above 10 percent.
C) all units of capital with an average revenue product below 10 percent.
D) all units of capital with an average revenue product above 10 percent.
E) no capital at all.