The value of the marginal product of new capital increases when the:
A. the price of the good the firm produces decreases.
B. real interest rate increases.
C. price of new capital goods increases.
D. productivity of new capital increases.
Answer: D
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In the case of a small country, producer surplus
A) increases more with a tariff than with an equivalent quota. B) increases more with a quota than with an equivalent tariff. C) is not changed by tariffs or quotas. D) increases the same with tariffs and equivalent quotas. E) increases more with quotas.
Although tacit collusion can enhance the price-setting power of the participating firms, it can also result in greater efficiency in production, which also benefits society
Thus, it is not immediately clear, a priori, when tacit collusion actually hurts or helps consumers. Indicate whether the statement is true or false