Q14 of 36 Page 1

From the following total cost and total revenue schedule of a firm, find out the level of output, using marginal cost and marginal revenue approach, at which the firm would be in equilibrium. Give reasons for your answer.


The producer is in equilibrium at 4th unit of output where –


1) MR = MC and


2) MC is rising from the point of equilibrium


At 3rd unit of output MR = MC but the second condition is not satisfied that is the MC is not rising from that point.


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