CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

Assume that Company B is the only producer of breakfast cereal. If, at the current level of production, the marginal revenue for a box of cereal is $2.50 while the marginal cost is $2.00, we would expect Company B to ______
A. hold the level of production constant.
B. increase the level of production.
C. raise the price of a box of cereal.
Explanation: The monopolist will continue to increase production as long as marginal revenue is greater than marginal cost.

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