Explain why will a producer not be in equilibrium if the conditions of equilibrium are not met.

Explain why will a producer not be in equilibrium if the conditions of

1.	Explain why will a producer not be in equilibrium if the conditions of equilibrium are not met.
Answer» Solution :The equilibrium conditions are (i) MC = MR: and (II)`MC gt MR` after equilbrium. SUPPOSE MC=MR condition is notmet. Let `MC gtMR`.In this , it will be profitable for the firm to produce more or less depending upon the RELATIVE change in MC and MR TILL MC = MR. Similarly , if `MC gt MR`, it will also be profitable to produce more till MC=MR. Now Suppose `MCgt MR` after equilibrium condition is not met and `MC lt MR` after equilibrium . in this case, the firm will not be in equilibrium because it can increase its profits by producing more.