- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 4. Breakeven Analysis and Shutdown Decision
CFA Practice Question
As long as marginal cost is below marginal revenue, a competitive firm should ______
B. hold production constant.
C. decrease production.
A. increase production.
B. hold production constant.
C. decrease production.
Correct Answer: A
Since the revenue obtained from selling another unit of output exceeds the cost of producing that unit, it is profitable to increase production.
User Contributed Comments 2
| User | Comment |
|---|---|
| danlan | Revenue=output, cost=input, revenue-cost=net income |
| khalifa92 | the profoundness of this recipe is awe |