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# From the Following Data Find Out the Level of Output that Will Give the Producer Maximum Profit (Use Marginal Cost and Marginal Revenue Approach,) Give Reasons For Your Answer - CBSE (Arts) Class 12 - Economics

ConceptAverage and Marginal Physical Products

#### Question

From the following data find out the level of output that will give the producer maximum profit (Use marginal cost and marginal revenue approach,) Give reasons for your answer

 Output (units) 1 2 3 4 5 Total Cost (Rs) 9 17 24 29 36 Total Revenue (Rs) 11 20 27 32 35

#### Solution

 Output(Units) Total Revenue(Rs) Total Cost(Rs) MR = TRn - TRn-1 MC = TCn - TCn- 1 1 11 9 11 9 2 20 17 9 8 3 27 24 7 7 4 32 29 5 5 5 35 36 3 7

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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#### APPEARS IN

Solution From the Following Data Find Out the Level of Output that Will Give the Producer Maximum Profit (Use Marginal Cost and Marginal Revenue Approach,) Give Reasons For Your Answer Concept: Average and Marginal Physical Products.
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