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Lighting2551 Lighting2551
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4 years ago

Question 1.

A firm chooses its profit-maximizing quantity of capital by



▸

comparing the price of capital with the price of labor.



▸

determining the rate at which the firm can borrow funds to purchase plant and equipment.



▸

comparing the marginal revenue product of capital with the rental price of capital.



▸

examining the total cost of capital equipment.



Question 2.

The demand for capital is similar to the demand for labor in that



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both are inelastic at high prices and elastic at low prices.



▸

the marginal revenue product curve for labor is the same as the marginal revenue product curve for capital.



▸

both are derived demands.



▸

the marginal product of labor is derived from the marginal product of capital.

Textbook 
InMicro

InMicro


Edition: 1st
Authors:
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cooldawg69cooldawg69
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Lighting2551 Author
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4 years ago
Brilliant
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