Author Question: All of the following are examples of explicit cost a firm might incur except A) taxes owed to the ... (Read 85 times)

armygirl

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All of the following are examples of explicit cost a firm might incur except
 
  A) taxes owed to the state government.
  B) the revenue a firm generates in using its resources.
  C) the rental value of the warehouse space the company owns and uses for itself.
  D) the out-of-pocket expense to hire employees.

Question 2

What determines demand and supply in rental markets for capital and land?
 
  What will be an ideal response?



flannelavenger

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Answer to Question 1

C

Answer to Question 2

The demand for capital depends on the value of marginal product of capital; the demand for land depends on the value of marginal product of land. The higher the marginal product of capital or land, the greater the demand for capital or land. Additionally the demand for capital depends on the rental rate of capital and the demand for land depends on the rental rate of land. The higher the rental rates, the lower the quantities demanded. The supply of capital depends on the rental rate of capital. The higher the rental rate of capital, the greater is the quantity of capital supplied. The supply of land, however, is perfectly inelastic because its quantity is fixed.



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