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A Copper Mining Firm Has Discovered That There Is Gold

Question 48

Multiple Choice

A copper mining firm has discovered that there is gold mixed in with its copper ore.Since the marginal cost of mining the gold is negligible,they are willing to sell it at the current market price of $500 an ounce.If the rate of interest is 5%,the firm should expect the price next year


A) to rise to $505.
B) to rise to $525.
C) to rise to over $525.
D) to remain constant.

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