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The following table shows the investment and output options for an individual business. Employment of labour and technology is assumed to be constant. Capital Stock
The following table shows the investment and output options for an individual business. Employment of labour and technology is assumed to be constant. Capital Stock Output r9 LJ [Number of machines) (Number of units of output) 0 O 1 10 18 24 26 The business operates in competitive product and factor markets. Its output sells for $5 per unit. The price of a new machine is $200. Machines depreciate at a rate of 3 percent and the real interest rate is 2 percent. How many machines will the business choose to invest in? Select one
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