If water can be bottled at zero marginal cost,and if water prices are growing slower than the rate of interest,then owners would benefit by increasing their current bottling operations.

Question

Quizplus · Accepted Answer

If the marginal cost of bottling water is zero, then the owners can produce more without incurring any additional cost. As long as the demand for bottled water exists and prices are growing slower than the rate of interest, it would make sense for the owners to increase their bottling operations and benefit from the profits.

If Water Can Be Bottled at Zero Marginal Cost,and If