Q7 of 25 Page 1

With the help of the given schedule, determine the firm’s equilibriumusing marginal revenue -marginal cost approach. Give valid reasons in support of your answer.

A firm is in equilibrium when the profit is at maximum and it is the difference between total cost and total revenue.

In marginal revenue and cost approach, the marginal cost is equal to marginal revenue and total cost must cut the total revenue from below.


Here,


Total revenue=120


Quantity sold= 6


So,Market price=Rs20.


The producer attain equilibrium at output 1 as TC=TR.


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