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If the Marginal Revenue Product of Capital for a Profit-Maximizing

Question 32

Multiple Choice

If the marginal revenue product of capital for a profit-maximizing firm is $800 and the price of capital is $600, then the firm


A) has just the right amount of capital.
B) should decrease the amount of other inputs its production process requires.
C) should increase the amount of other inputs its production process requires.
D) should purchase or rent more capital.
E) should reduce the amount of capital.

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