# 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. - Economics

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

#### Solution

 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.

Concept: Basic Concepts of Cost
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