Page 2 - H. A Producer's equilibrium

nd
6. If MC is equal to MR at 2 level of output, 1
then any one of the output level can be
taken as state of producer’s equilibrium.
(true/false)

7. In the following diagram Producer’s 1
equilibrium is achieved at point ---------------
----

8. The profit of a firm diminishes when ------- 1
-- exceeds ----------- (MR&MC, AR&AC
,MC&MR ,MR&AR )
9. The other name of AR is ---------------. 1
10. Which one is not the condition of 1
equilibrium:
a. AR=MR
b. MR=MC

c. MC is rising when it cuts the MR
curve
d. Both b&c
Short answer type question (3 – 4 marks each)
11. Is the equality between MC&MR a necessary 3
condition of equilibrium ? explain

12. .Find out the equilibrium profit & output from the 3
following information about a firm.
Output 1 2 3 4 5

TR 7 14 21 28 35
TC 8 15 21 28 36

13. Explain the condition of producer’s equilibrium 4
with the help of a numerical example.