Question

Producer’s equilibrium refers to the situation where the producer ______.

Options

• Stops production permanently

• Has maximum or minimum revenue

• Gets maximum profit or minimum loss and has no tendency to change output

• Produces at the lowest possible output level

Answer 1

Producer’s equilibrium refers to the situation where the producer gets maximum profit or minimum loss and has no tendency to change output.

Explanation:

Producer’s equilibrium is that level of output at which profit is maximised or loss is minimised and the producer has no incentive to change the existing level of output.