- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 3. Marginal Revenue, Marginal Cost and Profit Maximization
CFA Practice Question
A firm is producing 100 units of output at a total cost of $400. The firm's average variable cost is $3 per unit. What is the firm's total fixed cost?
B. $100
C. $300
A. $1
B. $100
C. $300
Correct Answer: B
Total variable cost equals average variable cost multiplied by output, $300 in this case. Since total fixed cost is the difference between total cost and total variable cost, it must equal $100.
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