Answer to Question #53439 in Macroeconomics for Shan

Question

Suppose the Jamaica biscuit producing company, located in Kingston, has 100 ovens and the life of each oven is 5 years, and 20 ovens must be replaced each year.
If demand for the biscuits is constant, how many ovens will be replaced each year?

Answer 1

If the Jamaica biscuit producing company, located in Kingston, has 100 ovens and the life of each oven is 5 years, and 20 ovens must be replaced each year, then if demand for the biscuits is constant, then 20 ovens will be replaced each year, because in this case all ovens will be replaced in 5 years and no one oven will work more than 5 years.