Try please, i would rate if you tied and provide a reasonably good explanation , thanks!

Q4. The optimal capital stock. A leasing rm is in the business of borrowing money to buy capital and then renting that capital out to other rms [car rental agencies like Hertz and Enterprise operate on this principle). Like all firms, prots (1:) are given by n = revenue costs. And like any good prot-maximising firm, they choose the optimal profit maximising quantity of capital by nding dn/dK and setting it equal to zero. Your textbook notes that the derivative (the effect of one extra unit of investment in year t on prots in year t + 1) is: MPKt+1 X MRt+1 + (1 6)Pt+1 (1 + it)Pt (a) Give some intuition for this expression, making sure to define the terms as you go along. (b) From our earlier analysis of price-setting behaviour, we know that MRHI = Pt+1/(1+ :1). Given that, and assuming a production function of the form Y = K\"(EN)1'\