9. Advanced Analysis User cost is equal to the present value of future profits in the model...

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9. Advanced Analysis User cost is equal to the present value of future profits in the model presented in Figure 19B-2. Will the optimal quantity to mine in the present year increase or decrease if the market rate of interest rises? Does your result make any intuitive sense? (Hint: If interest rates are up, would you want to have more or less money right now to invest at the market rate of interest?) [LO19B.3]

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Microeconomics

ISBN: 9781108420969

15th Canadian Edition

Authors: Campbell R. Mcconnell, Stanley L. Brue, Sean M. Flynn, Thomas P. Barbiero

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