class 12 economics Producer's equilibrium notes
Producer's equilibrium ....... ...short and easy notes for board exam. 1. What do you mean by firm's equilibrium? > Equilibrium means absence of change. A firm is in equilibrium when he maximizes his profit. A firm in perfect competition, can produce any quantity at a given price because a perfect competition firm is price taker and quantity adjuster. Hence, in perfect competition, TR curve slopes downward from left to right. In monopoly and monopolistic competition, a producer can only sale more when he can reduce the price. In this state, a producer can fix the price and quantity both. POINTS; A firm is equilibrium when MR = MC or Marginal Revenue = Marginal Cost. A producer is in equilibrium when he maximizes his profit. At break even point, MR = MC. THE END