Question

In the context of producer's equilibrium which one of the following is incorrect?

• A. Minimum difference between $TR$ and $TC$.
• B. $MR=MC$
• C. Producer gets maximum profit, when the difference between $TR$ and $TC$ is maximum.
• D. In equilibrium situation, producer has no tendency to change his production behaviour.

Answer 1

Answer: (A)

Minimum difference between $TR$ and $TC$.

Minimum difference between TR and TC -In the context of producer's equilibrium, this statement is incorrect. Since, difference between TR and TC indicates profit of the firm and profit is maximized when the difference TR and TC is maximum.