The equilibrium rental income paid to the owners of capital at any point in time equals the:

Question

Quizplus · Accepted Answer

The equilibrium rental income paid to the owners of capital is determined by the value of the marginal product of capital. This means that the rental income reflects the additional value that each unit of capital contributes to the production process. As the value of the marginal product of capital increases, so does the equilibrium rental income paid to the owners of capital. Therefore, choice A is the correct answer. The marginal product of capital alone does not determine the equilibrium rental income, as it is also influenced by other factors such as the supply and demand for capital. The purchase price of capital is not directly related to the equilibrium rental income, as it is a one-time cost incurred by the firm when acquiring the capital. The wage paid to labourers is not directly related to the equilibrium rental income paid to the owners of capital, as they are two separate factors in the production process.

The Equilibrium Rental Income Paid to the Owners of Capital