The article explores how companies can increase their capital either by buying new equipment or by using their existing equipment more efficiently. The researchers developed a model to analyze how firms decide on the amount of capital and labor to use, as well as how intensively to use them. They found that adjusting the amount of capital is costly, while adjusting how intensively it is used is easier. The study also showed that changes in the price of capital and the required rate of return lead to quicker adjustments in the amount of capital used than previously thought.