How many screens will be built if the real interest rate is 5.5 percent?
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After paying the movie distributors and meeting all other non-interest expenses, the owner expects to net $2.00 per ticket sold. Construction costs are $1,000,000 per screen. A. Make a table showing the value of marginal product for each screen from the first through the fifth. What property is illustrated by the behavior of marginal products? B. How many screens will be built if the real interest rate is 5.5 percent? C. If the real interest rate is 7.5 percent? D. If the real interest rate is 10 percent? E. If the real interest rate is 5.5 percent, how far would construction costs have to fall before the builder would be willing to build a five-screen complex? A. Make a table showing the value of marginal product for each screen from the first through the fifth. What property is illustrated by the behavior of marginal products?
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