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Production and cost — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsProduction and cost1 Mark
Question
Producer's equilibrium cannot be attained at falling MC'. Justify.
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Answer

A producer cannot attain equilibrium at a falling MC because, a falling MC indicates that producer can earn more profits by raising level of production, hence the firm will keep the production rising, despite of rise in MC, if it is below MR curve.

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