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You are given the following information about a firm's investment decision. Price of firm's output: Pf = $250 Marginal production of capital (K): MPK

 

You are given the following information about a firm's investment decision. Price of firm's output: Pf = $250 Marginal production of capital (K): MPK = 6-K Price of capital: PK = $3500 Real interest rate: r = 0.12 Depreciation rate of capital: d = 0 How many units of capital should the firm purchase?

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