A technological improvement in the physical capital available to the firm has a similar impact on a firm's desired capital stock as

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A technological improvement in the physical capital available to the firm increases the productivity of capital and reduces its cost. This leads to a decrease in the price of capital goods, which makes it more attractive for firms to invest in capital and increase their desired capital stock. Therefore, choice C, a reduction in the price of capital goods, has a similar impact on a firm's desired capital stock as a technological improvement in the physical capital available to the firm. The other options do not have a similar impact on the desired capital stock.

A Technological Improvement in the Physical Capital Available to the Firm