The diagram below shows a firm's demand for its units of capital-coin- operated coffee machines.The firm places its machines in universities and colleges across Canada.
FIGURE 15- 1
-Refer to Figure 15- 1.The downward slope of the firm's investment demand curve can be explained by
A) the downward slope of the marginal cost of capital curve.
B) the negative relationship between the interest rate and the purchase price of the coffee machines.
C) the downward slope of the demand curve for the firm's product-cups of coffee.
D) the negative relationship between the interest rate and the present value of a future stream of MRPs generated by each coffee machine.
E) the relationship between the MRP of the coffee machine and technology improvements to the coffee machines.
Correct Answer:
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