What is the “Hotelling rule” for situations in which a producer can de
What is the “Hotelling rule” for situations in which a producer can determine when a good is sold?
A) Price must rise at exactly the rate of interest.
B) Marginal cost must rise at exactly the rate of interest.
C) Price minus marginal cost must rise at exactly the rate of interest.
D) Price plus marginal cost must rise at exactly the rate of interest.
E) Price and marginal cost must be independent of the rate of interest.
ANSWER
C
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