Question

explain producer's equillibrum bby MR and MC approach (answer according to 6 mark)​

Answer 1

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Producer's equilibrium refers to the state in which a producer earns his maximum profit or minimise its losses. According to MR-MC approach, the producer is at equilibrium,, when the Marginal Revenue (MR) is equal to the Marginal Cost (MC) and Marginal Cost curve must cut the Marginal Revenue curve from below

**A firm is said to be in equilibrium when it maximized its profit. It is also called as the difference between Total Revenue (TR) and Total Cost (TC). The firm equilibrium is explained with the help of two approaches they are as follows: Marginal Revenue and Marginal Cost approach (MR-MC approach)