A firm uses capital K to invest in its business and the marginal revenue from this investment
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Question:
A firm uses capital K to invest in its business and the marginal revenue from this investment is as follows: 1st K $2.54, 2nd K $2.02, 3rd K $1.6, 4th K $1.3 and 5th K $1.2. If the interest rate that the firm must pay to borrow capital is 25%, then if the firm borrows the optimal amount of capital, what is the firm’s total revenue?
$12.25
$8.66
$6.10
$7.46
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