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Exhibit: Rental Price of Capital Based on the Graph

Question 103

Multiple Choice

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 R<sub>3</sub> / P and capital stock K<sub>2</sub>, then holding other factors constant, an increase in the quantity of labour employed will move the real rental price of capital to: A) R<sub>1</sub> / P. B) R<sub>2</sub> / P. C) R<sub>4</sub> / P. D) R<sub>5</sub> / P. 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 quantity of labour employed will move the real rental price of capital to:


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

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