Which of the following does not directly affect the optimal stock of capital?
A) the price of output
B) the marginal product of labor
C) the depreciation rate
D) the risk premium
E) taxes

Question

Quizplus · Accepted Answer

The marginal product of labor directly affects labor demand rather than the optimal stock of capital. The optimal stock of capital is more directly influenced by factors such as the price of output, the depreciation rate, the risk premium, and taxes, which affect the cost of capital and the return on investment.

Which of the Following Does Not Directly Affect the Optimal