- 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
Average fixed cost ______
A. remains unchanged with increasing output.
B. continually declines with increasing output.
C. initially declines and then rises with increasing output.
User Contributed Comments 3
| User | Comment |
|---|---|
| Lamkerst | numerator is fixed, and denominator increases => result will be declining |
| BossMan | Law of diminished returns does not apply? |
| niuniucow | @BossMan: no. It's about cost, not return. |