The Situation Where a Firm Accepts Projects to the Point

question 140

True/False

The situation where a firm accepts projects to the point where the return on the last project accepted is just equal to or greater than the firm's required rate of return (IRR ≥ r at the margin)is called capital rationing.

---

Definitions:

Long-run Supply Curve

A graphical representation showing the relationship between the price level and the quantity of output that producers are willing to supply, taking into account all factors of production can be varied.

Profitable Output

The production or output level from a business operation that generates a financial gain or profit.

Firm

An organization engaged in commercial, industrial, or professional activities, typically with the aim of earning a profit.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a period when all factors of production can vary.