Question

Define Producer’s Equilibrium. Discuss briefly, the conditions of producer’s equilibrium, assuming that the producer can sell more units of the good by lowering the price.

Answer 1

Heya...

Ques :- Define Producer’s Equilibrium. Discuss briefly, the conditions of producer’s equilibrium, assuming that the producer can sell more units of the good by lowering the price.??

Ans ________________

• Producer equilibrium is the cost of maximum profit with least input cost...

• Producer didn't want to sell more output at lower price but if according to cost it is the best output then he will gain profit and will sell the good...

Thank you

Answer 2

"Equilibrium in generally signifies a situation where no transformation is needed or a place of rest.

Producer’s equilibrium is achieved when the producer has no desire to expand or reduce the output.

Conditions where producer can sell more units by reducing prices are as follows:-

MC = MR

MR is the sale of an extra unit and MC is added cost after total cost when production is increased by one unit.

MC is more than MR

This is a necessary condition for achieving equilibrium.

"