If the Marginal Product of Capital Is Greater Than the Rental

question 71

Multiple Choice

If the marginal product of capital is greater than the rental cost of capital in terms of goods and services,then ________.

• A)the firm should continue to produce using that same amount of capital
• B)the firm should add additional capital
• C)the firm should reduce the amount of capital is using
• D)diminishing returns have been avoided

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Definitions:

Conglomerate Merger

A type of business combination where two or more companies in unrelated industries come together to form a single corporate entity.

Budget Cutbacks

The process of reducing budgeted expenditures, often in response to fiscal deficits, economic downturns, or reallocation of resources.

Psychological Needs

Basic human motivations that include the need for love, esteem, belonging, autonomy, and competence, influencing behavior and well-being.

Terminated Employees

Employees who have been dismissed or laid off from their positions within an organization.