- 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
Which statement(s) is (are) true?
II. AFC increases as output increases.
III. When output is zero, total cost (TC) is equal to TFC, since TVC = 0.
I. Even if nothing is produced, fixed costs are still constant in the short run.
II. AFC increases as output increases.
III. When output is zero, total cost (TC) is equal to TFC, since TVC = 0.
Correct Answer: I and III
II. AFC decreases as output increases.
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