The competitive rate of return on capital can be equal to the interest rate only if you eliminate:

Question

Quizplus · Accepted Answer

The competitive rate of return on capital can be equal to the interest rate only if risk, inflation, and imperfect competition are eliminated. Monopolies and unions can still exist in a competitive market, and government intervention can also exist without necessarily affecting the rate of return on capital. However, risk and inflation can affect the real rate of return, and imperfect competition can limit the ability of firms to earn a competitive rate of return.

The Competitive Rate of Return on Capital Can Be Equal