The expected future marginal product of capital (in terms of dollars) for each level of capital.

Question

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Answer 1

Question

Chapter 4, Problem 2NP

a)

To determine

The expected future marginal product of capital (in terms of dollars) for each level of capital.

b)

To determine

The user cost of capital and the desired number of fabricators.

c)

To determine

The user cost of capital and the desired number of fabricators, when rate of interest decreases from 12% to 8%.

d)

To determine

The user cost of capital and the desired number of fabricators, when 40% of tax on company’s sales revenues are applicable.

e)

To determine

The number of fabricators purchased by company when a technical innovation doubles the productivity.

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The accompanying graph shows the short-run demand and cost situation for a price searcher in a market with low barriers to entry. Price (dollars) 24 8 MC ATC MR 30 D 45 50 Quantity/time The firm will maximize its profit at a quantity of units. After choosing the profit maximizing quantity, the firm will charge a price of The firm will receive $ in revenue at the profit-maximizing quantity. The total cost of production for this profit-maximizing quantity is S The maximum profit the firm can earn in this situation is $ per unit for this output. How will the situation change over time? Profits will attract rival firms into the market until the profit-maximizing price falls to the level of per-unit cost. ◇ Losses will induce firms to leave this market until the profit maximizing price falls to zero. The market will adjust until the price charged by this firm no longer exceeds marginal cost at the profit-maximizing quantity. This market is already in long-run equilibrium, and will not…

Answer 2

Question

Chapter 4, Problem 2NP

a)

To determine

The expected future marginal product of capital (in terms of dollars) for each level of capital.

b)

To determine

The user cost of capital and the desired number of fabricators.

c)

To determine

The user cost of capital and the desired number of fabricators, when rate of interest decreases from 12% to 8%.

d)

To determine

The user cost of capital and the desired number of fabricators, when 40% of tax on company’s sales revenues are applicable.

e)

To determine

The number of fabricators purchased by company when a technical innovation doubles the productivity.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 2NP

a)

To determine

The expected future marginal product of capital (in terms of dollars) for each level of capital.

b)

To determine

The user cost of capital and the desired number of fabricators.

c)

To determine

The user cost of capital and the desired number of fabricators, when rate of interest decreases from 12% to 8%.

d)

To determine

The user cost of capital and the desired number of fabricators, when 40% of tax on company’s sales revenues are applicable.

e)

To determine

The number of fabricators purchased by company when a technical innovation doubles the productivity.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 2NP

a)

To determine

The expected future marginal product of capital (in terms of dollars) for each level of capital.

b)

To determine

The user cost of capital and the desired number of fabricators.

c)

To determine

The user cost of capital and the desired number of fabricators, when rate of interest decreases from 12% to 8%.

d)

To determine

The user cost of capital and the desired number of fabricators, when 40% of tax on company’s sales revenues are applicable.

e)

To determine

The number of fabricators purchased by company when a technical innovation doubles the productivity.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 2NP

a)

To determine

The expected future marginal product of capital (in terms of dollars) for each level of capital.

b)

To determine

The user cost of capital and the desired number of fabricators.

c)

To determine

The user cost of capital and the desired number of fabricators, when rate of interest decreases from 12% to 8%.

d)

To determine

The user cost of capital and the desired number of fabricators, when 40% of tax on company’s sales revenues are applicable.

e)

To determine

The number of fabricators purchased by company when a technical innovation doubles the productivity.

Answer 6

Chapter 4, Problem 2NP

a)

To determine

The expected future marginal product of capital (in terms of dollars) for each level of capital.

Answer 7

Chapter 4, Problem 2NP

a)

To determine

The expected future marginal product of capital (in terms of dollars) for each level of capital.

Answer 8

b)

To determine

The user cost of capital and the desired number of fabricators.

Answer 9

b)

To determine

The user cost of capital and the desired number of fabricators.

Answer 10

c)

To determine

The user cost of capital and the desired number of fabricators, when rate of interest decreases from 12% to 8%.

Answer 11

c)

To determine

The user cost of capital and the desired number of fabricators, when rate of interest decreases from 12% to 8%.

Answer 12

d)

To determine

The user cost of capital and the desired number of fabricators, when 40% of tax on company’s sales revenues are applicable.

Answer 13

d)

To determine

The user cost of capital and the desired number of fabricators, when 40% of tax on company’s sales revenues are applicable.

Answer 14

e)

To determine

The number of fabricators purchased by company when a technical innovation doubles the productivity.

Answer 15

e)

To determine

The number of fabricators purchased by company when a technical innovation doubles the productivity.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 4 - Prob. 1RQ Ch. 4 - Prob. 2RQ Ch. 4 - Prob. 3RQ Ch. 4 - Prob. 4RQ Ch. 4 - Prob. 5RQ Ch. 4 - Prob. 6RQ Ch. 4 - Prob. 7RQ Ch. 4 - Prob. 8RQ Ch. 4 - Prob. 9RQ Ch. 4 - Prob. 10RQ

The expected future marginal product of capital (in terms of dollars) for each level of capital.

The expected future marginal product of capital (in terms of dollars) for each level of capital.

The user cost of capital and the desired number of fabricators.

The user cost of capital and the desired number of fabricators, when rate of interest decreases from 12% to 8%.

The user cost of capital and the desired number of fabricators, when 40% of tax on company’s sales revenues are applicable.

The number of fabricators purchased by company when a technical innovation doubles the productivity.

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Chapter 4 Solutions