Saying a Firm Will Continue Investing Up to the Point

question 83

Multiple Choice

Saying a firm will continue investing up to the point at which the marginal revenue product of capital is equal to the price of capital is equivalent to saying that a firm will keep investing in new capital up to the point where

• A) the expected rate of return is zero.
• B) economic profit is zero.
• C) the expected rate of return is equal to the interest rate.
• D) the price of capital equals the interest rate.

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Definitions:

Sac Fungi

A group of fungi belonging to the Ascomycota Phylum, characterized by the production of spores in special structures called asci.

Ascomycota

A phylum of fungi characterized by the formation of spores in sac-like structures called asci, which includes many medically and industrially important species.

Basidiomycota

A large division of fungi, commonly known as club fungi, that includes mushrooms, toadstools, puffballs, and shelf fungi, characterized by producing spores on basidia.

Karyogamy

The final phase of the sexual cycle of fungi and algae, where the nuclei of two mating types or gametes fuse together to form a zygote.