Firms will find it profitable to add to their capital stock in the Neoclassical model of business fixed investment under the following conditions:
1. If the expected return on investment in new capital is greater than the cost of acquiring and maintaining that capital.
2. If there is sufficient demand for the firm's products or services to justify the additional investment in capital.
3. If the firm has access to financing options that allow them to invest in new capital without significantly increasing their overall costs.
4. If technological advancements or changes in market conditions require the firm to upgrade or expand their capital stock in order to remain competitive.
5. If there are no major obstacles or barriers preventing the firm from acquiring and implementing new capital, such as regulatory restrictions or resource constraints.
1. In the Neoclassical model of business fixed investment, under what conditions will firms
find it profitable to add to their capital stock�
1 answer