If a firm's MRP of capital MFC, the firm should

Name: If a firm's MRP of capital > MFC, the firm should
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Question

If a firm's MRP of capital > MFC, the firm should

Quizplus · Accepted Answer

If a firm's Marginal Revenue Product (MRP) of capital is greater than its Marginal Factor Cost (MFC), it means the firm is generating more revenue from the last unit of capital than it costs to acquire. Therefore, it is profitable for the firm to increase its quantity demanded of loanable funds to invest in more capital.

If a Firm's MRP of Capital > MFC, the Firm