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The theory of the firm under perfect competition — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsThe theory of the firm under perfect competition3 Marks
Question
Explain producer’s equilibrium with the help of a diagram.
✓

Answer


A producer is in equilibrium at that level of output at which the difference between Total Revenue and Total Cost is maximum. In the diagram, OQ is the equilibrium output at which total profit equals RC = RQ – CQ.

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