CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

The output decisions of a monopolistic competitor are based on the following principle:
A. The marginal principle
B. The principle of diminishing returns
C. The principle of opportunity cost

User Contributed Comments 3

User Comment
Pooh For price searcher, in order to increase output, it must set a lower price, which leads to decreasing marginal revenue - the change in total revenue that results from one additional output is smaller due to lowered price.
eddeb Increase output as long as Marginal revenue exeeds Marginal cost (per unit)
MarcCFA I'd call it the marginal benefit principle, why not abbreviate it to margin principle, or even just M?
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