Question 54
HardOriginal questionA firm's MR is ₹30 at every output and its MC for units 1 to 5 is ₹40, ₹28, ₹25, ₹30, ₹38. What is its equilibrium output?
Show the answer and explanation
CorrectNot quiteAnswer C
Correct answer: C
Explanation
MC = MR = ₹30 at the 4th unit, and MC is rising there (25 → 30 → 38).
The 5th unit costs ₹38 but earns only ₹30, so the firm stops at 4.
- Concept
- Equilibrium from MC and MR
- Typical timeTypical
- 100 s
- Your timeYours
- —
Practise this chapter →
Ten questions from Revenue & Producer's Equilibrium, at your own pace.