Consider the market for commercial ovens as a factor of production in the commercial bread industry.Assume that all commercial ovens are identical,they have a lifespan of 10 years,and the purchase price is $12 000.The present value of the stream of MRPs from the last oven purchased by each commercial bakery is $16 000.We can expect that
A) profit-maximizing firms will reduce their capital stock of ovens until the PV of the stream of MRPs falls to $12 000.
B) investment demand by all firms will fall until the PV of the stream of MRPs falls to $12 000.
C) investment demand by all firms will rise until all firms have an identical capital stock.
D) the purchase price of commercial ovens will fall until the price is equated with the PV of the stream of MRPs.
E) investment demand by all firms will increase and there will be a tendency for the price of commercial ovens to rise.
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