Question

Giving reasons identify the equilibrium level of output and find profit at this output using Marginal Cost and Marginal Revenue approach from the following:

| Output (Units) | Total Revenue (in Rs) | Total cost (in Rs.) |
| 12345 | 815212630 | 813192736 |

Answer 1

The producers is in equilibrium at 3 units of output

Reasons:

(i) MR = MC

(ii) MC > MR after equilibrium

Profit π = TR – TC

=21-19

Profit = Rs.2