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pls provide me with a producers equilibrium notes in detail ?
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pls provide me with a producers equilibrium notes in detail ?
The producer will be in equilibrium when he is earning maximum profit. According to MC-
MR approach, producer strikes his equilibrium when two conditions are satisfied
(a ) MC = MR, and
(b) MC curve must cuts MR curve from below or MC curve should be rising.
Explanation of Conditions
(i) So longs as MC is less than MR, it is profitable for the producer to go on producing more
because it adds to its profits. He stops producing more when MC becomes equal to MR.
(ii) When MC is greater than MR after equilibrium it means the profit will decline if producer
will produce more units of the good.
(iii) Hence the level of output where marginal revenue and marginal cost are equal is the point of
maximum profit.
MR approach, producer strikes his equilibrium when two conditions are satisfied
(a ) MC = MR, and
(b) MC curve must cuts MR curve from below or MC curve should be rising.
Explanation of Conditions
(i) So longs as MC is less than MR, it is profitable for the producer to go on producing more
because it adds to its profits. He stops producing more when MC becomes equal to MR.
(ii) When MC is greater than MR after equilibrium it means the profit will decline if producer
will produce more units of the good.
(iii) Hence the level of output where marginal revenue and marginal cost are equal is the point of
maximum profit.
Community Answer
pls provide me with a producers equilibrium notes in detail ?
producer equilibrium can be explained by two ways 1 Total cost and Total Revenue2. Marginal cost and Marginal revenue
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pls provide me with a producers equilibrium notes in detail ?
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pls provide me with a producers equilibrium notes in detail ? for Economics 2024 is part of Economics preparation. The Question and answers have been prepared according to the Economics exam syllabus. Information about pls provide me with a producers equilibrium notes in detail ? covers all topics & solutions for Economics 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for pls provide me with a producers equilibrium notes in detail ?.
pls provide me with a producers equilibrium notes in detail ? for Economics 2024 is part of Economics preparation. The Question and answers have been prepared according to the Economics exam syllabus. Information about pls provide me with a producers equilibrium notes in detail ? covers all topics & solutions for Economics 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for pls provide me with a producers equilibrium notes in detail ?.
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