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Elaborate the implication of the conditions of equilibrium of a firm.

Answer» <html><body><p><br/></p><a href="https://interviewquestions.tuteehub.com/tag/solution-25781" style="font-weight:bold;" target="_blank" title="Click to know more about SOLUTION">SOLUTION</a> :Firm's <a href="https://interviewquestions.tuteehub.com/tag/equilibrium-974342" style="font-weight:bold;" target="_blank" title="Click to know more about EQUILIBRIUM">EQUILIBRIUM</a> is that level of output where its profits are maximised. <br/> Conditions of Firm's Equilibrium: <br/> (i) Marginal Revenue must b equaltoMarginal Cost. <br/> (ii) Marginal Cost mustbe rising. <br/> The conditions <a href="https://interviewquestions.tuteehub.com/tag/implies-1037962" style="font-weight:bold;" target="_blank" title="Click to know more about IMPLIES">IMPLIES</a> that the slope of rising Marginal Cost Curve is <a href="https://interviewquestions.tuteehub.com/tag/equal-446400" style="font-weight:bold;" target="_blank" title="Click to know more about EQUAL">EQUAL</a> to the slope of Marginal Revenue curve. <br/> <img src="https://d10lpgp6xz60nq.cloudfront.net/physics_images/SG_MIC_ECO_C08_E01_011_S01.png" width="80%"/> <br/> Implication of the conditions lies in the fact that beyond the equilibrium point E, MC <a href="https://interviewquestions.tuteehub.com/tag/would-3285927" style="font-weight:bold;" target="_blank" title="Click to know more about WOULD">WOULD</a> become greater than MR i.e., for each additional unit sold beyond output OQ, the cost of producing that unit will be more than the revenue generated by the unit.</body></html>


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