  Change in user cost 
    of capital resultet
from interest rate change

Shift in MPK due to 
technological change

Interest rate change

Technology change

Capital stock, K

Expected future MPK

uc¹

uc²

MPK₁

MPK₂

Changes in desired capital stock

A = Intersect(xAxis, yAxis)
B = (8, 0)
C = Point(yAxis)
a = Segment(A, B)
b = Segment(A, C)
e = 0 (slider from -0.5 to 0.5, step 0.1)
f = 0 (slider from -0.5 to 0.5, step 0.1)
g: y = 4 + e
h: y = 5.1 + f - 0.3 * x
D = Intersect(c, d)
E = Intersect(g, h)
F = (0, 4)
G = (8, 4)
i = Segment(F, G)
H: (0, 4 + e)
I: (8, 4 + e)
J = (0, 5.1)
K: (8, d(8))
j = Segment(J, K)
k = Segment(H, I)
L: (0, h(0))
M: (8, h(8))
l = Segment(L, M)
N: (1, c(1))
O: (1, g(1))
u = Vector(N, O)
P: (6, d(6))
Q: (6, h(6))
v = Vector(P, Q)