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PtichkaEL [24]
3 years ago
15

If the real rental price of capital is $10,000 per unit and the real cost of capital is $9,000 per unit, to maximize profits a f

irm should: add to its capital stock. keep its capital stock unchanged. let its capital stock shrink. reduce the real rental price of capital.
Business
1 answer:
Phoenix [80]3 years ago
8 0

Answer:

Add to its capital stock.

Explanation:

Rental firms earn profit by buying goods and renting them out at a price higher.The advantage of owning capital is the real rental price of capital for the units of capital owned and rented.

In this case, the real rental price of capital is $10,000 per unit where as the real cost of capital is $9,000 per unit. This means the firm is getting a profit from the business of $1000 per units assuming interest on their loans, cost of loss/ gain  on the price of capital and depreciation costs are taken care.To maximize profit at this level, the firm can increase capital stock by buying more goods and renting them out at the current real rental price of capital.

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Answer:

$150

Explanation:

Calculation to determine How much does the investor gain or lose if the oil price at the end of the contract equals $14.0

Using this formula

Gain or Loss =(Futures price- Ending contract)*Contract size

Let plug in the formula

Gain or Loss=$15.5 per barrel- $14.0* 100 barrels

Gain or Loss=$1.5*100

Gain or Loss=$150

Therefore How much does the investor gain or lose if the oil price at the end of the contract equals $14.0 will be $150

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Answer:

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Hence from the given option  They will decrease as production decreases as the number of units of goods produced will decrease and hence lesser raw material and packaging will be required to produce the goods.

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