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If the Shadow Price of a Given Resource Is $100

question 39

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If the shadow price of a given resource is $100 and the cost of expanding the capacity of that resource is $80 per unit, then the expansion of the capacity will:


Definitions:

Net Worth

The value of all assets a person or corporation owns, minus the liabilities they owe; a measure of financial health.

Liabilities

A debt owed by a business to another organization or individual.

Assets

Resources owned by a business or individual that have economic value and can provide future benefits.

Venture Capitalist

An investor who provides capital to startup ventures or supports small companies that wish to expand but do not have access to equities markets.

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