Exhibit: Rental Price of Capital 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 increase in the capital stock to K3 will change the real rental price of capital to:
A) R1 / P.
B) R2 / P.
C) R4 / P.
D) R5 / P.
Correct Answer:
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