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Both Capital Budgeting and Rental Approaches to Capital Employment Decisions

Question 37

Multiple Choice

Both capital budgeting and rental approaches to capital employment decisions agree that


A) capital should be "hired" under imperfect competition as long as the marginal benefit of capital is climbing to its rental price.
B) capital should be "hired" under perfect competition as long as the marginal benefit of capital is climbing to its rental price.
C) capital should be "hired" as long as the marginal benefit of capital is climbing to its rental price regardless of market structure.
D) capital should be "laid off" as long as the marginal benefit of capital is falling to its rental price even under imperfect competition.
E) none of the above.

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