rental rate
(noun)
The price of capital.
Examples of rental rate in the following topics:
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Capital and Technology
- Firms add capital to the point where the value of marginal product of capital is equal to the rental rate of capital.
- Because of this, we say that the price of capital is the rental rate.
- A firm will continue to add capital up to the point where the rental rate is equal to the value of marginal product of capital , which is the point of equilibrium.
- Firms will increase the quantity of capital hired to the point where the value of marginal product of capital is equal to the rental rate of capital.
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Inputs and Outputs of the Function
- Although in reality a firm may own the capital that it uses, economists typically refer to the ongoing cost of employing capital as the rental rate because the opportunity cost of employing capital is the income that a firm could receive by renting it out.
- Thus, the price of capital is the rental rate.
- The price of labor is the prevailing wage rate, since wages are the cost of hiring an additional unit of capital.
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Conditions of Equilibrium
- Equilibrium in the labor market requires that the marginal revenue product of labor is equal to the wage rate, and that MPL/PL=MPK/PK.
- The supply of labor is elastic and increases with the wage rate (upward sloping supply); and
- The point at which the MRPL equals the prevailing wage rate is the labor market equilibrium.
- The cost of that action will be the output lost from cutting back on capital, which is the ratio of the marginal product of capital (MPK) to the price of capital (the rental rate, PK).
- The optimal demand for labor is located where the marginal product equals the real wage rate.
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Return on Investment
- The purpose of the "return on investment" metric is to measure per-period rates of return on dollars invested in an economic entity.
- ROI is often compared to expected (or required) rates of return on dollars invested.
- There may also be an increase in maintenance costs and property taxes, or an increase in utility rates if the owner of a residential rental or commercial property pays these expenses.
- Complex calculations may also be required for property bought with an adjustable rate mortgage (ARM) with a variable escalating rate charged annually through the duration of the loan.
- (To know more about ARM, check out: Mortgages: Fixed-Rate Versus Adjustable-Rate. )
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Change in Household Size
- The term generally applies to people living together in rental properties rather than in properties in which any resident is an owner-occupier.
- A shared house is formed when a group of people move into a rental property; typically, one or more of these people has applied to rent the property through a real estate agent, been accepted, and signed a lease.
- This is due to a variety of economic and social changes, such as the declining affordability of home ownership, as well as delayed marriage and decreasing marriage rates.
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The Nonworking Poor
- These policies include: welfare state generosity, including unemployment and child benefits; increased wages and benefits, which may have a positive effect on unskilled workers who are likely to be among the nonworking poor; increased vocational education and training for the same demographic; child support assurance, especially for families headed by a single parent; and increased rates of marriage, although a lack of good employment opportunities may not lower the poverty rate among low-income people.
- Although the working poor are employed at least some of the time, they often find it difficult to save enough money for a deposit on a rental property.
- As a result, many working poor people end up in living situations that are actually more costly than a month-to-month rental.
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Individual Taxes
- Individuals are subject to federal graduated tax rates from 10% to 35%.
- Sales tax is an indirect tax levied on the state level, including taxes on retail sale, lease and rental of goods, as well as some services.
- Sales tax is calculated as the purchase price times the appropriate tax rate.
- Tax rates vary widely by jurisdiction from less than 1% to over 10%.
- This graph shows the effective sales tax rates for the 50 states.
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Linear Mathematical Models
- A linear model includes the rate of change $(m)$ and the initial amount, the y-intercept $b$.
- A rental company charges a flat fee of $$30$ and an additional $$0.25$ per mile to rent a moving van.
- The total cost is equal to the rate per mile times the number of miles driven plus the cost for the flat fee:
- Second, in order to write the equations representing each train's total distance in terms of time, calculate the rate of change for each train.
- Train B is traveling towards A, which has a lesser $y$ value, giving B a negative rate of change: $-80$.
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Global Marketing in the U.S.
- Example: The primary objective of the company is to achieve a synergy in the overall operation, so that by taking advantage of different exchange rates, tax rates, labor rates, skill levels, and market opportunities, the organization as a whole will be greater than the sum of its parts.
- Example of Franchising: Holiday Inn, Hertz Car Rental, and McDonald's have all expanded into foreign markets through franchising.
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Try these multiple choice problems.
- People visiting video rental stores often rent more than one DVD at a time.
- The probability distribution for DVD rentals per customer at Video To Go is given below.
- The probability distribution for DVD rentals per customer at this shop is given below.
- If Video to Go expects 300 customers next week and Entertainment HQ projects that they will have 420 customers, for which store is the expected number of DVD rentals for next week higher?
- Which of the two video stores experiences more variation in the number of DVD rentals per customer?