CFA Practice Question

There are 923 practice questions for this topic.

CFA Practice Question

Refer to the graph below. If the firm produces 700 units of output per day, it ______

A. can increase profit by producing more.
B. can increase profit by producing less.
C. will be maximizing profit.
Correct Answer: B

Since marginal cost exceeds marginal revenue at this output level, profits can be increased by producing less.

User Contributed Comments 3

User Comment
azramirza isnt since MC is greater then demand the firm needs to produce more rather than less? or reduce to 600 where mc=mr. right?
southeuro reduce to where mc=mr then draw vertical line to demand to find the price that maximises.
maryprz14 beautiful question, I hope actual test's difficulty level be the same!!! :/
You need to log in first to add your comment.