Q7 of 38 Page 1

Given the following schedule, state at which level of output, will the firm

be at equilibrium and why.




The equilibrium is at the point at the 4th unit because both the conditions required for attaining equilibrium are satisfied:


a. MR = MC = 10


b. MC increases after the point of equilibrium


More from this chapter

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22

Given the following data, find the values of ‘Operating Surplus’ and ‘Gross Domestic Capital Formation’ :

 5

Explain briefly the central problem of ‘‘For whom to produce’’.

 10

What is meant by ‘negative returns to a factor’ ? Discuss any two

reasons behind negative returns to a factor.


 18

If marginal propensity to consume is 80% and is constant at all levels of

income, and the autonomous consumption is Rs. 400 crores, construct


consumption function of the given hypothetical economy.