If capital gain rises, a firm should:
A) consider shutting down.
B) invest in financial assets, like stocks.
C) invest in more capital.
D) lower its output prices.
E) lay off some of its workers.

Question

Quizplus · Accepted Answer

If capital gain rises, it means the value of the assets owned by the firm has increased. Therefore, the firm should invest in more capital to expand its operations and take advantage of the increased value of its assets. This can help the firm generate more revenue and increase its profitability in the long run.

If Capital Gain Rises, a Firm Should