- CFA Exams
- CFA Level I Exam
- Study Session 4. Economics (1)
- Reading 12. Topics in Demand and Supply Analysis
- Subject 4. Marginal Returns and Productivity
CFA Practice Question
As the quantity of labor increases, which of the following is the most likely outcome with respect to the marginal revenue product (MRP) of labor?
A. MRP increases for a monopoly.
B. MRP decreases for a firm in perfect competition.
C. MRP increases for both a monopoly and a firm in perfect competition.
Explanation: MRP decreases for a firm in perfect competition, due to a decline in marginal product.
User Contributed Comments 0
You need to log in first to add your comment.