Evenwicht huur: De markt voor kapitaal

Capital is used to produce goods and services. For an orchard, capital includes heavy machines such as tractors and simple equipment such as ladders and spades.

For example, in orchards, ladders are used to pick mangoes.

These ladders could be easily supplied by renting from households. Other suppliers could include cooperatives and farmers' associations.

The demand for ladders comes from the orchard owners, who decide how many items of capital to rent based on the value of their marginal product.

The forces of demand and supply determine the rental rate.

Similar to labor and land, the demand curve for the capital item ladder is downward-sloping, and it shows the value of the marginal product of capital.

The supply of ladders is upward-sloping because the owners supply more ladders at a higher rental rate.

The equilibrium rental rate is established at the intersection of the demand and supply curves for ladders. The equilibrium quantity is the number of ladders rented at this rate.