Nature of Competition: Machine Power Rental 02
There are largely two sources of supplying a kind of machine to the rental market, some of those evacuated at expiry of the rental contract and others newly constructed during the period. Incidentally, “the created” are aggregated into the gross domestic investment ( I for investment). Construction of the machine. In practice, the machine is generally lumpy and endures for multiple periods of accounting. As such, the household purchases, or invests in, a machine more for the future than for the present. The process of making the investment decision when in finance is called “ capital budgeting .” Most probably, the so-called “ financial economists ” have in mind the firm under strict (corporate) governance. The right interpretation, accordingly: The owning households of the firm collectively make the investment decision and take the subsequent actions; then on, the firm rents the ready-made...