Question

Heya _____

Is producer is in equilibrium in the situation of losses ??

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Answer 1

【H】【E】【Y】 【M】【A】【T】【E】

PRODUCER EQUILIBRIUM refers to a situation of Profit maximisation.A producer strike his equilibrium at the level of output where profit is maximised.Producer Equilibrium is also strikes in two condition---------

>When MR=MC

>MC is rising than MR beyond the point of equilibrium output .

>But in situation of loss,the producer is not in a position of producer equilibrium because the cost of producing an additional unit of output tends to reduce.

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Answer 2

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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.