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Author Question: The firm in the table below produces denim jeans and each unit of capital represents one sewing ... (Read 21 times)

isam

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on: Oct 12, 2022
The firm in the table below produces denim jeans and each unit of capital represents one sewing machine. The MRP for each of machines 10 through 14 is provided. Each sewing machine delivers a stream of MRPs beginning one year from now, for a total of 2 years. Assume that after 2 years each sewing machine is worth nothing.

Number of
Sewing Machines		Annual MRP
10$2000
11$1800
12$1600
13$1400
14$1200

TABLE 15-2

Refer to Table 15-2. Suppose the interest rate is 4%, the purchase price of a sewing machine is $3000, and the firm is holding its optimal capital stock. If the interest falls to 2%, how will this firm adjust its capital stock?
◦ It will not change its capital stock.
◦ It will increase its number of machines from 11 to 12.
◦ It will increase its number of machines from 13 to 14.
◦ It will reduce its number of machines from 14 to 13.
◦ It will reduce its number of machines from 12 to 11.
Microeconomics ¦ Ragan ¦ 17th Edition
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Marked as best answer by isam on Oct 12, 2022

Harsh06

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Reply #1 on: Oct 12, 2022
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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isam

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Reply 2 on: Oct 12, 2022
Great answer, keep it coming :)

amcvicar

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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