(Table: Revenues and Costs for Two Industries) Suppose That the Table

Multiple Choice

(Table: Revenues and Costs for Two Industries) Suppose that the table gives payments to labor, land, and capital in the manufacturing and agriculture sectors. Now, suppose that the price of manufacturing goods increases by 10% (P_M) , and wages increase by 5%; then the rental rate on land will:

A) increase by 7.5%.
B) decrease by 5%.
C) decrease by 7.5%.
D) not change.