The Arbitrage Condition for Capital Demonstrates That Under Profit-Maximizing Conditions

Multiple Choice

The arbitrage condition for capital demonstrates that under profit-maximizing conditions:

A) returns to a bank account are equal to the return to capital.
B) returns to a bank account are equal to the user cost of capital.
C) if taxes are zero, profits are maximized.
D) profit maximizing will yield the optimal amount of capital a firm should buy.
E) the user cost is less than the marginal product of capital.