#cfa #cfa-level-1 #economics #lol #microeconomics #reading-15-demand-and-supply-analysis-the-firm
The candidate should be able to:
calculate, interpret, and compare accounting profit, economic profit, normal profit, and economic rent;
calculate and interpret and compare total, average, and marginal revenue;
describe a firm’s factors of production;
calculate and interpret total, average, marginal, fixed, and variable costs;
determine and describe breakeven and shutdown points of production;
describe approaches to determining the profit-maximizing level of output;
describe how economies of scale and diseconomies of scale affect costs;
distinguish between short-run and long-run profit maximization;
distinguish among decreasing-cost, constant-cost, and increasing-cost industries and describe the long-run supply of each;
calculate and interpret total, marginal, and average product of labor;
describe the phenomenon of diminishing marginal returns and calculate and interpret the profit-maximizing utilization level of an input;
determine the optimal combination of resources that minimizes cost.