Question: Please show your work Use the optimality condition (MPK = R) to derive the optimal level of future capital K' for this firm as a
Please show your work
Use the optimality condition (MPK = R) to derive the optimal level of future capital K' for this firm as a function of parameters and prices (K, 0, 2, R, and 8). This should take the form of an equation where you have K on the right-hand side, and all the parameters on the left-hand side. Does the optimal amount of capital in period 2 (K'), depend on the initial value of capital (K)? Use the optimality condition (MPK = R) to derive the optimal level of future capital K' for this firm as a function of parameters and prices (K, 0, 2, R, and 8). This should take the form of an equation where you have K on the right-hand side, and all the parameters on the left-hand side. Does the optimal amount of capital in period 2 (K'), depend on the initial value of capital (K)
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