If the MRPK is less than the cost of capital, a firm should increase its investment in physical capital. decrease its investment in physical capital. exit the industry. keep its investment in physical capital the same.
If the MRPK is less than the cost of capital, a firm should increase its investment in physical capital. decrease its investment in physical capital. exit the industry. keep its investment in physical capital the same.
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter14: Investment, The Capital Market, And The Wealth Of Nations
Section: Chapter Questions
Problem 2CQ
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1. If the MRPK is less than the cost of capital, a firm should
increase its investment in physical capital.
decrease its investment in physical capital.
exit the industry.
keep its investment in physical capital the same.
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