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1. Demand of commodities

2. cost of production

3. Foreign trade

4.Rate of population growth

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Q: What 4 factors have an effect on the marginal efficiency of capital?
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Define diminishing marginal product of capital?

Diminishing marginal product of capital is an economic principle that refers to the concept that when the input is increased and the other inputs are kept at the same level than it may initially increase output. However, if the inputs continue to increase with no other changes there may be limited effect or eventually negative effect on the output.


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What effect does friction have on a machines efficiency?

Efficiency of the machine is reduced due to loss of energy by friction.


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