The Equilibrium Rental Price of Capital Is Determined by the

question 115

Multiple Choice

The equilibrium rental price of capital is determined by the

• A)market's marginal revenue product of capital.
• B)firm's marginal revenue product of capital.
• C)firm's demand for capital.
• D)market's demand for and supply of capital.
• E)market's demand for capital.

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that vary directly with the level of production or sales volume.

Net Present Value

A method used in finance to calculate the value of a series of future cash flows by converting them into one lump sum present value.

Net 30 Credit Policy

A Net 30 credit policy is a payment term that allows customers to pay the full invoice amount within 30 days after the invoice date.