Saying a Firm Will Continue Investing Up to the Point

Multiple Choice

Saying a firm will continue investing up to the point at which ________ is equivalent to saying that a firm will keep investing in new capital up to the point where the expected rate of return is equal to the interest rate.

A) the marginal product of capital is equal to the marginal product of labor
B) the interest rate is equal to the inflation rate
C) the marginal revenue product of capital is equal to its rental cost
D) the return on capital is equal to depreciation