Marginal Product of Labor : Wage :: Marginal Product of Capital : ?

In a competitive market a firm hires workers until the extra output a worker brings (the marginal product of labor) equals the worker’s wage; otherwise hiring more would raise costs more than revenue. The same idea applies to machines or equipment: a firm will keep adding capital as long as the extra output a machine adds (its marginal product of capital) is higher than the cost of renting or buying that machine. Thus the marginal product of capital is matched to the price a firm pays for capital, often called the rental rate or price of capital. For example, if buying a new machine costs $200 a month and it adds 10 extra units of output, the firm will keep using it only if the extra revenue from those 10 units exceeds $200. Hence the analogy is: Marginal Product of Labor : Wage :: Marginal Product of Capital : Rental rate of capital.