Is producers equilibrium a point of revenue maximization?
Answers
Producer equilibrium is that point in which producer produce that level of output at which producers earn maximum profits.
This situation is occurs only
When MC must cut MR curve
MC curve more than point of equilibrium
Explanation:
Heya _____
⭐ Producer Equilibrium :-
⚪ Definition ____
Producer equilibrium is the point of maximum profit for the producer where the revenue of a product exceed its production cost ...
⚪ Conditions required for this __
Producer equilibrium strike only when these two conditions apply at that point ...
▪ MR = MC
The meant by this approach is marginal revenue is equals to marginal cost ...
because _
√ If MC is greater then MR then producer can cut in production and can earn more profit...
√ If MR is greater then MC then a producer can increase in production to earn more profit...
▪ MC must be rise at next level
At the point of Equilibrium MC should be rise within next production level ...
because __
√ MC rise means law of variable proportion is holding in production due to this that will be last stage of positive production...
__ So, it was the full concept and conditions of production equilibrium ...
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