The Diagram Below Shows a Firm's Demand for Its Units

question 48

Multiple Choice

The diagram below shows a firm's demand for its units of capital-coin- operated coffee machines.The firm places its machines in universities and colleges across Canada.
FIGURE 15- 1
-Refer to Figure 15- 1.The downward slope of the firm's investment demand curve can be explained by

• A)the downward slope of the marginal cost of capital curve.
• B)the negative relationship between the interest rate and the purchase price of the coffee machines.
• C)the downward slope of the demand curve for the firm's product-cups of coffee.
• D)the negative relationship between the interest rate and the present value of a future stream of MRPs generated by each coffee machine.
• E)the relationship between the MRP of the coffee machine and technology improvements to the coffee machines.

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Definitions:

Dividends

Payments made by a corporation to its shareholders, often derived from profits.

Bring Suit

To initiate a legal action against someone in a court of law.

Investment Securities

Financial instruments, such as stocks or bonds, in which individuals or entities can invest with the expectation of earning a return.

Transfer

The act of moving or conveying something from one place, person, or entity to another.