If a firm wants to buy a piece of capital equipment, is this firm a demander or supplier in the financial market?
What will be an ideal response?
A financial market is where firms get the funds to buy capital. So, if the firm wants to buy a piece of capital equipment, the firm will be looking for funds to borrow. Hence the firm is a demander in the financial market.
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If the government replaces a lump sum tax with a proportional labor income tax, then
A) employment and output increase. B) employment increases and output decreases. C) employment decreases and output increases. D) employment and output decrease.
If the loss-minimizing output for a perfectly competitive firm is zero, then, at all other output levels,
a. price must be greater than average variable cost b. the marginal cost curve must slope downward c. marginal cost is less than marginal revenue d. total revenue is less than total variable cost e. total revenue is less than average variable cost