1.2. Suppose that two industries, the pizza industry and the calzone industry, are equally risky, but rates...

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1.2. Suppose that two industries, the pizza industry and the calzone industry, are equally risky, but rates of return on capital investments are only 5% in the pizza industry and 8% in the calzone industry.

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w a:J 230 • PART 3 • Firms and Factor Markets Which way will capital flow- from the pizza industry to the calzone industry, or from the calzone industry to the pizza industry?

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