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.
|Total Revenue(Rs)||Total Cost(Rs)||MR = TRn - TRn-1||MC = TCn - TCn-1|
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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