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The loanable funds theory and the liquidity preference theory can be reconciled by recognizing that
Desired Profit
The target amount of money a business aims to earn over a certain period.
Fixed Costs
Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.
Average Variable Cost
The total variable costs of production divided by the number of units produced, representing the variable cost per unit.
Store Traffic
The number of people who visit a retail location within a given time frame.
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