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From the following total cost and total ...

From the following total cost and total revenue schedule of a firm. Find out the level of output suing marginal cost and marginal revenue approach , at which at firm would be in equilibrium . Give reasons for your answer.

Text Solution

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The firm's equilibrium is achieved at 4th unit of output. It is because this level of output satisfies both the conditions of producer's equilibrium :
(i) MC = MR (Rs.4) ` " " ` (ii) MC gt MR (Rs.8 gt Rs.2) after equilibrium level of output.
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