How does leasing help with the durable good problemSolutionI

How does leasing help with the durable good problem?

Solution

If hope you are not talking about durable good monopoly problem. durable goods are bulky and quite costly. Leasing helps by reducing the payment that the buyer has to pay initially. Over the period of time those who have leased may earn even greater than cost of asset while even those who take durable good on lease will earn sufficient to pay the amount of lease. Leasing also helps the firms to create Demand and sell durable goods. Also better machinery can be used at lower price. Further there are lower repair costs.