- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 1. Supply Analysis: Cost, Marginal Return, and Productivity
CFA Practice Question
The profit maximization decision is producing the level of output such that ______
II. MC is not falling.
III. MR = MC
IV. TR = TC
I. MR is not rising.
II. MC is not falling.
III. MR = MC
IV. TR = TC
Correct Answer: II and III
User Contributed Comments 5
| User | Comment |
|---|---|
| maryprz14 | Can someone explain this please? |
| babycdq | Why I is wrong? |
| choas69 | WHY 2 is right? |
| Samir3112 | MC assumes an U shaped curve in the short run, so for low levels of cost , the MR curve might intersect MC curve at two different points. W e need to choose only that point(quantity of output) where MC is increasing. |
| MathLoser | Guys, watch this awesome video. He explained: OMG I can't paste the link here. Search Maximizing Profit Practice - Micro Topic 3.5 Jacob Clifford on youtube. And that guys explained many things about micro and macro topics. I found it worth reading like diminishing return, short run, long run, etc |