+1 vote
in Class 12 by kratos

A producer can sell any quantity of a commodity at a given price of 10 per unit. His cost schedule is given below:

| Output (Units) | 1 | 2 | 3 | 4 | 5 | 6 |
| Total Cost (in Rs.) | 12 | 22 | 31 | 38 | 48 | 60 |

How many units should he produce to get maximum profits? Explain.

1 Answer

+6 votes
by kratos
 
Best answer

The producer is in equilibrium producing 5 units because this meets both the conditions of equilibrium.

(i) MC = MR

(ii) MC > MR after equilibrium.

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