Question

Firms with the most profitable investment opportunities are willing and able to pay the most for capital, so they tend to attract it away from less efficient firms or from those whose products are not in demand.

Answer 1

Answer:

True

Explanation:

It is true because capital, such as any other resource, has a cost. More established and profitable companies have a lower risk in the market and can afford possible losses with more sustainability than small business, hence they are usually the main target of capital investment. To counterpoint this market behavior, governments usually develop programs of capital support to small businesses, especially those that meet the necessity of minorities or areas with a high unemployment rate.