When the rate of return exceeds the marginal cost, then it is in the restaurant's financial interest to invest the additional capital.

Question

Quizplus · Accepted Answer

When the rate of return exceeds the marginal cost, it means that the investment will bring in more profits than the cost of producing the additional products or services. Therefore, the restaurant will benefit financially from investing the additional capital.

When the Rate of Return Exceeds the Marginal Cost, Then