With the help of the table given below, find producer's equilibri… - Vidyadip

Question

With the help of the table given below, find producer's equilibrium using MR and MC approach. Give reason for your answer.

Quantity Sold (Units)	TR (₹)	AC (₹)
1	20	20
2	40	15
3	60	12
4	80	10
5	100	12
6	120	15

✓

Answer

Output (Units)	TR (₹)	MR (₹)	AC (₹)	TC (₹)	MC (₹)	Profit (2) (π = TR - TC)
1	20	20	20	20	20	0
2	40	20	15	30	10	10
3	60	20	12	36	6	24
4	80	20	10	40	4	40
5	100	20	12	60	20	40
6	120	20	15	90	30	30

Producer's equilibrium is struck when output level = 5 units.
Reason: At output levels 1st and 5th units, both MR and MC are equal, which is equal to 20 in both the cases. But producer is in equilibrium at 5th unit only where profit is maximum (= 40).
The producer is in equilibrium when the level of output =5 units.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "4 Marks Question" from MICROECONOMICS CH : 10 PRODUCER'S EQUILIBRIUM→MICROECONOMICS CH : 10 PRODUCER'S EQUILIBRIUM — all question types→Economics STD 11 Commerce question papers→CBSE Board STD 11 Commerce question papers→CBSE Board question paper generator→

Similar questions

Following are the marks obtained by 20 students in an English test:
5, 16, 17, 17, 20, 21, 22, 22, 22, 25, 25, 26, 26, 30, 31, 31, 34, 35, 42, 48 Prepare a frequency distribution taking class interval of 10 using exclusive and inclusive method.

A consumer consumes only two goods X and Y. The marginal rate of substitution is 2. Prices per unit of goods X and Y are ₹5 and ₹4 respectively. Is consumer in equilibrium? What will be the further reaction of the consumer?

From the following data, construct a weighted index number for $2010$ with $2000$ as base year:

Items	Weight	Prices
Items	Weight	2000	2010
Wheat	15	10	15
Rice	10	8	16
Pulses	5	5	10
Milk	4	2	4
Oil	6	4	6
Sugar	7	3	6
Salt	3	1	2

Calculate coefficient of correlation by Karl Pearson method.

X	1	3	4	5	8	9
Y	4	6	9	10	15	16

What is meant by producer's equilibrium? What are its main conditions?

Explain producer's equilibrium with the help of a table.

Explain the effect of rise in input prices on the supply of a good.

Prepare 'less than’ cumulative frequency series:

Marks	0-10	10-20	20-30
Number of Student	4	6	10

When price of a good falls from $₹10$ per unit to $₹9$ per unit, its demand rises from $9$ units to $10$ units. Compare expenditures on the good to find price elasticity of demand.

What is the relation between Good-X and Good-Y in each case, if with fall in the price of Good-X demand for Good-Y (i) rises, and (ii) falls? Give reason.