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Producer's
Equilibrium
CH 8 Microeconomics | Class 11
Hand-written Notes
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 Microeconomics
Chapter - 8
Producer’s Equilibrium

Producer 's Equilibrium

It combination which
refersmascimum
to that
price and output
brings profit to the producer and
profit decline
as more is
produced .

This is studied under 2 Approach

MR -

Mc
Approach TR -

Tc
Approach

* MR -
MC Approach
It has 2 conditions

a) When Mc -
MR
it
As
long as

the
mccmr
,
is
profitable
for producer to
goadds
on

it to its
producing the
more as

profit then
.

when
, stops producing more

only MC becomes
equal to MR .
b. Mc > MR
after MC MR
-

When will
Mc > MR
after equilibrium ,
it means
producing more

lead decline
to in
profits .

MCLMR

Li = MC = MR ,
L2 =
Mc = MR

schedule :

Price Units TR Te MR MC Profit

unit sold

10 1 10 10 10 10 O

10 2 20 19 10 9 I
10 3 30 26 10 7 4
10 4 40 36 to 10 4
10 5 50 48 10 12 2