Should the company increase its level of capital

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Reference no: EM131007149

With the current level of capital is the marginal product for capital 0,12. The rate of depreciation is 6%, the nominal interest rate of a company loan is 8% and the expected rate of inflation is 3%. Should the company increase its level of capital?

a) What should they do if the product market has full competition (please write with equations)

b) A market with monopolistic competetion and a mark-up of 20%

Reference no: EM131007149

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