Refer to the Following Figure

question 19

Multiple Choice

Refer to the following figure:
The price of capital is $50 per unit.
-What is the marginal rate of technical substitution at each cost minimizing equilibrium point?

• A) 0.80
• B) 0.40
• C) 2.50
• D) 2.00
• E) impossible to tell without marginal products

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Definitions:

Business Risk

The exposure to uncertainty and potential loss in a company’s operations due to factors like fluctuations in revenue or expenses.

Financial Risk

The possibility of losing money on an investment or business venture, often due to changes in the financial markets or failure to meet debt obligations.

Financial Risk

The possibility of losing money on an investment or business venture, often associated with the potential for financial loss due to market volatility, credit risk, and liquidity risk.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated as total debt divided by total assets.