In a perfect market,where lessors compete with one another in initiating leases,the cost of leasing is equivalent to
A) the cost of purchasing and future reselling price of the asset.
B) the future cost of purchasing and reselling the asset.
C) the cost of purchasing and reselling the asset.
D) the future cost of purchasing and future reselling price of the asset.

Question

Quizplus · Accepted Answer

In a perfect market, where competition among lessors is high, the cost of leasing is equivalent to the cost of purchasing and reselling an asset in the future. This is because the lessor needs to price their leases competitively to attract lessees, which involves taking into account the cost of purchasing and reselling the asset over its life. The cost of future reselling prices may be considered but would not be the sole determining factor in the cost of leasing an asset in a perfect market.

In a Perfect Market,where Lessors Compete with One Another in Initiating