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Exhibit: Rental Price of Capital Based on the Graph

Question 84

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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 improvement in technology that increases the marginal productivity of capital will move: A) the demand curve from D<sub>2</sub> to D<sub>1</sub>. B) the demand curve from D<sub>2</sub> to D<sub>3</sub>. C) the supply of capital from K<sub>2</sub> to K<sub>1</sub>. D) the supply of capital from K<sub>2</sub> to K<sub>3</sub>. 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 improvement in technology that increases the marginal productivity of capital will move:


A) the demand curve from D2 to D1.
B) the demand curve from D2 to D3.
C) the supply of capital from K2 to K1.
D) the supply of capital from K2 to K3.

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