Giving reasons find at out the level of output at which producer will be in equilibrium (Use Marginal Cost and Marginal Revenue approach.)

Question 1

| Output (Units) | 1 | 2 | 3 | 4 | 5 |
| Total Cost | 21 | 39 | 54 | 72 | 93 |
| Total Revenue | 18 | 36 | 54 | 72 | 90 |

Question 2

The conditions of producers equilibrium are:

(i) MC must be equal to MR (MC = MR)

(ii) Beyond the level of output at which MC=MR, MC must be greater than MR]

Both these conditions are satisfied at 4 units of outputs so producer is in equilibrium if he produces 4 units of output.

kratos · Answer 1 · 2020-05-05T00:29:32+0000

The conditions of producers equilibrium are:

(i) MC must be equal to MR (MC = MR)

(ii) Beyond the level of output at which MC=MR, MC must be greater than MR]

Both these conditions are satisfied at 4 units of outputs so producer is in equilibrium if he produces 4 units of output.

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