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MICROECONOMICS CH : 10 PRODUCER'S EQUILIBRIUM — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsMICROECONOMICS CH : 10 PRODUCER'S EQUILIBRIUM1 Mark
Question
The producer strikes his equilibrium only when MP is diminishing.
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Answer

True. A producer strikes his equilibrium only when MP is diminishing. Because, diminishing MP means rising MC. The producer stops production when rising MC matches with MR. Beyond this point, rising MC would exceed MR, causing loss of profit.

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