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What is the user cost of capital

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What is the user cost of capital?

Marginal product of capital in the next year: MPK = 206 - 4K units of output per additional unit of capital per year

Real interest rate: r = 0.05 per year

Depreciation rate of capital: d = 0.10 per year

Price of capital: pK = 200 units of output per unit of capital

Capital stock at beginning of year: K0 = 40 units of capital

Reference no: EM132476885

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