In the following diagram, at points E and E MC and MR are equal. Among

1.	In the following diagram, at points E and E MC and MR are equal. Among these, which point do you consider as producer’s equilibrium? Justify your answer.
Answer» In this diagram, producer’s equilibrium is at point E_r This is because this point satisfies all the conditions of equilibrium. The conditions for attaining equilibrium are, (i) MC = MR (ii) MC must cut MR from below These two conditions are satisfied at point E₂

In the following diagram, at points E and E MC and MR are equal. Among these, which point do you consider as producer’s equilibrium? Justify your answer.

Answer»

In this diagram, producer’s equilibrium is at point E_r This is because this point satisfies all the conditions of equilibrium.

The conditions for attaining equilibrium are,

(i) MC = MR

(ii) MC must cut MR from below These two conditions are satisfied at point E₂