MEC is the expected rate of return on capital and MEI is the expected rate of return on investment.
MEC is the highest rate of return expected from an additional unit of capital stock over its cost. MEI is the expected rate of return from one additional unit of investmeni.
The marginal cost of capital (MCC) is the cost of the last dollar of capital raised, essentially the cost of another unit of capital raised. As more capital is raised, the marginal cost of capital rises.
Fixed costs do not affect short-run marginal cost because they are just that- fixed. They are not dependent on quantity when it changes and does not vary directly with the level of output. Variable costs, however, do affect short-run marginal costs.
Demand.
MEC is the expected rate of return on capital and MEI is the expected rate of return on investment.
Marginal revenue/margina utility return from capital represents the benefit of capital. When determining the optimal amount of capital, we must take into account the point when marginal benefit = marginal cost. This optimises profit/utility.
MEC is the highest rate of return expected from an additional unit of capital stock over its cost. MEI is the expected rate of return from one additional unit of investmeni.
The marginal cost of capital (MCC) is the cost of the last dollar of capital raised, essentially the cost of another unit of capital raised. As more capital is raised, the marginal cost of capital rises.
Marginal or incremental cost of capital is cost of the additional capital raised in a given period
Using a hurdle rate can help take the emotion out of defining capital value. This is the advantage of using the marginal cost of capital as the hurdle rate.
Take the first-order derivative of the cost of capital function.
what is the different between diminishing marginal productivity and decreasing return to scale?
Fixed costs do not affect short-run marginal cost because they are just that- fixed. They are not dependent on quantity when it changes and does not vary directly with the level of output. Variable costs, however, do affect short-run marginal costs.
return on capital = earnings before interest and tax / capital employed * 100
Demand.
because of deprecation