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प्रश्न
From the following total cost and total revenue schedule of a firm, find out the level of output, using marginal cost and marginal revenue approach, at which the firm would be is equilibrium. Give reasons for your answer.
| Output (Units) |
Total Revenue (Rs ) |
Total Cost (Rs ) |
| 1 | 10 | 8 |
| 2 | 18 | 15 |
| 3 | 24 | 21 |
| 4 | 28 | 25 |
| 5 | 30 | 33 |
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उत्तर
| Output (Units) |
Total Revenue(Rs) | Total Cost(Rs) | MR = TRn - TRn-1 | MC = TCn - TCn-1 |
| 1 | 10 | 8 | 10 | 8 |
| 2 | 18 | 15 | 8 | 7 |
| 3 | 24 | 21 | 6 | 6 |
| 4 | 28 | 25 | 4 | 4 |
| 5 | 30 | 33 | 2 | 8 |
The firm would be in equilibrium when following two conditions are satisfied:
1) MR = MC
2) MC is rising or the MC curve cuts the MR curve from below.
Thus, at 4 units of output, the firm is in equilibrium as both the conditions are getting satisfied at this level.
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