It is not correct to say that a company ought to rent more capital "if the marginal output of capital is smaller than the rental rate of capital." Hence we conclude that the statement is FALSE.
This is further explained below.
<h3>What is
the marginal product?</h3>
Generally, In neoclassical economics, the marginal product is the change in output that occurs from utilizing one more unit of a particular input, assuming that the values of all other inputs remain constant. Marginal product is the difference in output that occurs when an extra unit of input is used.
In conclusion, if the MPK is greater than the rental rate of capital, then the only time a firm should employ more capital is when they need it.
This is the only time that a company should employ additional capital.
It is not correct to say that a company ought to rent more capital "if the marginal output of capital is smaller than the rental rate of capital."
Read more about the marginal product
brainly.com/question/14039562
#SPJ1