CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

In the short run, an increase in output at low levels of production will most likely cause ______.
A. an increase in the marginal cost due to the rising total fixed cost
B. an increase in the marginal cost due to the law of diminishing returns
C. a decrease in the marginal cost due to economies from greater specialization
Explanation: The marginal cost decreases at low levels of output due to economies from greater specialization. However, at higher levels of production, it eventually increases because of the law of diminishing returns.

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