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Bubblyparabola Bubblyparabola
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A year ago
Suppose a dairy farmer is considering the purchase of an additional milking machine at a price of $4000. She expects the discounted MRP of the machine in Year 1 to be $1700, in Year 2 to be $1500 and in Year 3 to be $1200, after which the machine has no value. The farmer should

▸ be indifferent about the purchase because its present value is approximately equal to its purchase price.

▸ buy the machine because its present value is $400 more than its purchase price.

▸ buy the machine because its marginal revenue is $400 more than its marginal cost.

▸ not buy the machine because its marginal revenue is $400 less than its marginal cost.

▸ not buy the machine because its present value is $400 less than its purchase price.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
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benschmannbenschmann
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A year ago
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This site is awesome
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