Page 3 - H. A Producer's equilibrium
P. 3
When MR > MC, then producer will continue to produce as long as MR
becomes equal to MC. It is so because firm will find it profitable to raise
the output level.
When MR < MC, then producer will cut down the production as long as MR
becomes equal to MC. It is so because firm will find it Unprofitable to
produce an extra unit. So, it starts reducing the level of output till MR =
MC.
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