How is capital valued?
What will be an ideal response?
The value of capital is measured by the value of services that it will render the firm over time.
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The difference between the value of a good to sellers and its price is known as: a. consumer surplus. b. producer surplus. c. demand
d. supply.
Answer the following statement true (T) or false (F)
1) A firm's optimal amount of R&D occurs where the interest-rate cost of funds and the expected rate of return are equal. 2) Successful new products enable consumers to increase the total utility they obtain from a specific amount of their total spending. 3) Process innovation is represented as a downward shift in a firm's total product curve and its average total cost curve. 4) The theory that R&D expenditures as a percentage of firms' sales first rise, reach a peak, and then fall with increases in industry concentration is called the inverted-U theory of R&D. 5) The process by which new firms and new products destroy existing dominant firms and their products is called creative destruction.