QUESTIONS 33 THROUGH 44 RELATE TO ECONOMICS

42. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2013
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2013

42. A firm in a perfectly competitive environment has its total costs equal to total revenue and

marginal costs greater than marginal revenue. Given this, which of the following strategies is

most appropriate? The firm should:

A. shut down in the short run and exit in the long run.

B. increase its level of production to enter profit territory.

C. decrease its level of production to enter profit territory.