Microeconomics

posted by .

The Burning Belly Taco Stand is considering buying some new special ovens. Each oven will cost $1,000, and will last for 2 years before it wears out. The ovens will be used to make the Taco Stands famous "Burning Ring of Fire" tacos, and will generate a value of marginal product of $600 for the first oven, $570 for the second oven, and $530 for the third oven.(Assume all revenues are earned at the end of the year.) If the interest rate is 10 percent, how many ovens will the Burning Belly Taco Stand buy? (hint: calculate the present value of the VMP (value of marginal product) of the first, second and third oven, and compared that with the purchase price of the oven)

Can someone tell me the steps I should do, or exactly how to do this question?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. microeconomics

    Consider the markets for pizza and fried chicken. Show graphically and explain the impact(s) you would expect if technological change leads to the development of a pizza oven that is both much cheaper and uses less energy than current …
  2. Microeconomics

    Consider the markets for pizza and fried chicken. Show graphically and explain the impact you would expect if technological change leads to the development of a pizza oven that is both much cheaper and uses less energy than current …
  3. Chemistry

    microwave ovens work by irradiating food with microwaves, which is absorbed by the water molecules in the food and is converted into heat. Assuming that microwave ovens emit radiation with a wavelength of 12.2cm, calculate how many …
  4. Microeconomics

    The Burning Belly Taco Stand is considering buying some new special ovens. Each oven will cost $1,000, and will last for 2 years before it wears out. The ovens will be used to make the Taco Stands famous "Burning Ring of Fire" tacos, …
  5. statistics

    if a toaster ovens hav an average life expectancy of 9.5 years with a standard deviation of 4.75 years. what is the probability that a toaster oven will last twenty years or will fail in one year or less?
  6. science

    which of the following is more eco-friendly than the others?
  7. Chemistry

    Microwave ovens heat food by creating microwave electromagnetic radiation that is absorbed by water molecules in the food. Any material that does not have water in it will not absorb the radiation and will not get hot. Metals reflect …
  8. heat transfer

    how microwave ovens work,and explain how they cook much faster than conventional ovens.Discuss whether conventional electric or microwave ovens consume more electricity for the same task.
  9. Algebra

    You and a friend eat tacos. You order 2 tacos and 5 burritos which equals $19. Your friend orders 1 taco and 4 burritos which equals $14. Find the cost of a taco and a burrito. Please help
  10. American gov

    16. What ruling did the Supreme Court make regarding flag burning in Texas v. Johnson?

More Similar Questions