CAPE Economics Unit 1 · 2012 · Paper 2 · Question 5(e)
A computer has a two-year lifespan and yields a marginal revenue product (MRP) of $3,000 at the end of Year 1 and Year 2. Given an interest rate of 5%, determine the maximum price that should be paid for the computer using marginal productivity theory.
The mark scheme is shown once you've answered.
Practise this question