- 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
Suppose that an additional unit of output would require 5 additional hours of labor and 7 additional units of materials. If the wage is $15 per hour and the price of materials is $2 per unit, what is the marginal cost of production?
Correct Answer: $89
The marginal cost is the cost of inputs necessary to produce 1 more unit of output. In this case, the marginal cost is (5 * $15) + (7 * $2) = $89.
User Contributed Comments 0
You need to log in first to add your comment.