- 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
Because the marginal cost curve tells us how much output a firm will produce at a given price, the marginal cost curve is the firm's ______.
B. marginal revenue curve
C. supply curve
A. average cost curve
B. marginal revenue curve
C. supply curve
Correct Answer: C
Firms choose output by setting price equal to marginal cost in a perfectly competitive market.
User Contributed Comments 1
| User | Comment |
|---|---|
| Bududeen | This should read.... In a perfectly competitive market, a firm chooses output ,at least, at the point where it's marginal cost equals the market price. ..because the firm is a price-taker |