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The Presence of Capital Rental Markets Gives Firms

Question 57

Multiple Choice

The presence of capital rental markets gives firms:


A) the ability to hire more labor in periods of high demand by keeping capital costs fixed.
B) reduced flexibility in substituting among various labor and capital inputs.
C) the ability to hire more capital in periods of high demand by keeping capital costs fixed.
D) the flexibility to adjust capital usage to output levels, making capital costs variable.

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