what is a producer in equilibrium?
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A firm (producer) is said to be in equilibrium when it has no inclination to expand or to contract its output. This state either reflects maximum profits or minimum losses. There are two methods for determination of Producer's Equilibrium: 1.
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Producer's equilibrium is often explained in terms of marginal revenue (MR) and marginal cost (MC) of production. Profit is maximized (or a producer strikes his equilibrium) when two conditions are satisfied – (i) MR = MC, and (ii) MC is rising (or MC is greater than MR beyond the point of equilibrium output).
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