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Finding Increase or Decrease Percentage in Situations

Given below i...

Question

Given below is a cost and revenue schedule of a producer. At what level of output is the producer in equilibrium? Give reasons for your answer.
Quantity Sold
(Units) Price
(Rs. per unit) Total Cost
(Rs.)
1 $15$ $14$
2 $16$ $24$
3 $17$ $30$
4 $18$ $51$
5 $19$ $75$

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Solution

Units Price (per unit) TC TR Profit (TR-TC)
1 15 14 15 1
2 16 24 32 8
3 17 30 51 21
4 18 51 72 21
5 19 75 95 20

The producer is in equilibrium when $4$ units of output are produced. It is here that the difference between TR and TC is maximum, along with the fact that MR=MC, and MC is rising.

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