- CFA Exams
- CFA Level I Exam
- Study Session 4. Economics (1)
- Reading 12. Topics in Demand and Supply Analysis
- Subject 6. Marginal Revenue, Marginal Cost, and Profit Maximization
CFA Practice Question
At levels of output where the firm's short-run average cost curve is increasing, ______
A. the marginal cost curve is above the short-run average cost curve.
B. the marginal cost curve is below the short-run average cost curve.
C. the marginal cost curve may be above or below the short-run average cost curve.
Explanation: At levels of output greater than the minimum of the short-run average cost curve, the marginal cost curve is above the short-run average cost curve.
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