- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Topics in Demand and Supply Analysis
- Subject 4. Supply Analysis: Cost, Marginal Return, 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.
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