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A firm is said to be in equilibrium when
- a)its customers get maximum satisfaction
- b)it fulfills its social responsibility
- c)it gets maximum market coverage
- d)its profits are maximized
Correct answer is option 'D'. Can you explain this answer?
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A firm is said to be in equilibrium whena)its customers get maximum sa...
Equilibrium of a firm refers to a state where it maximizes its profits by balancing the demand and supply of its products in the market. This means that the firm is producing and selling the optimal quantity of goods and services.
Factors that contribute to the equilibrium of a firm
1. Supply and demand: The equilibrium of a firm depends on the balance between the supply and demand of its products in the market. The firm must produce the amount of goods that the consumers are willing to buy at a price that maximizes its profits.
2. Price: The price of the product plays a crucial role in determining the equilibrium of a firm. The firm must set the price of the product in such a way that it covers its costs and also generates maximum profits.
3. Production costs: The cost of producing the product is another important factor that determines the equilibrium of a firm. The firm must minimize its production costs while maintaining the quality of the product.
4. Competition: The level of competition in the market also affects the equilibrium of a firm. The firm must be able to compete with other firms in the market by offering better quality products at competitive prices.
Why profits are maximized in equilibrium?
When a firm is in equilibrium, it is producing and selling the optimal quantity of goods at the optimal price. This means that the firm is generating maximum revenue while minimizing its costs. As a result, the profits of the firm are maximized.
In conclusion, a firm is said to be in equilibrium when it produces and sells the optimal quantity of goods at the optimal price, which results in the maximum profit.
Factors that contribute to the equilibrium of a firm
1. Supply and demand: The equilibrium of a firm depends on the balance between the supply and demand of its products in the market. The firm must produce the amount of goods that the consumers are willing to buy at a price that maximizes its profits.
2. Price: The price of the product plays a crucial role in determining the equilibrium of a firm. The firm must set the price of the product in such a way that it covers its costs and also generates maximum profits.
3. Production costs: The cost of producing the product is another important factor that determines the equilibrium of a firm. The firm must minimize its production costs while maintaining the quality of the product.
4. Competition: The level of competition in the market also affects the equilibrium of a firm. The firm must be able to compete with other firms in the market by offering better quality products at competitive prices.
Why profits are maximized in equilibrium?
When a firm is in equilibrium, it is producing and selling the optimal quantity of goods at the optimal price. This means that the firm is generating maximum revenue while minimizing its costs. As a result, the profits of the firm are maximized.
In conclusion, a firm is said to be in equilibrium when it produces and sells the optimal quantity of goods at the optimal price, which results in the maximum profit.
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A firm is said to be in equilibrium whena)its customers get maximum satisfactionb)it fulfills its social responsibilityc)it gets maximum market coveraged)its profits are maximizedCorrect answer is option 'D'. Can you explain this answer?
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A firm is said to be in equilibrium whena)its customers get maximum satisfactionb)it fulfills its social responsibilityc)it gets maximum market coveraged)its profits are maximizedCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A firm is said to be in equilibrium whena)its customers get maximum satisfactionb)it fulfills its social responsibilityc)it gets maximum market coveraged)its profits are maximizedCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A firm is said to be in equilibrium whena)its customers get maximum satisfactionb)it fulfills its social responsibilityc)it gets maximum market coveraged)its profits are maximizedCorrect answer is option 'D'. Can you explain this answer?.
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