﻿ Explain the conditions of producer’s equilibrium with the help

## Pre Boards

Practice to excel and get familiar with the paper pattern and the type of questions. Check you answers with answer keys provided.

## Sample Papers

Download the PDF Sample Papers Free for off line practice and view the Solutions online.

## CBSE Class 12 Economics Solved Question Paper 2013

11.

Explain “large number of buyers and sellers” features of a perfectly competitive market.

1755 Views

12.

Production in an economy is below its potential due to unemployment. Government starts employment generation schemes. Explain its effect using production possibilities curve.

1133 Views

# 13.Explain the conditions of producer’s equilibrium with the help of a numerical example.

Equilibrium refers to a state of rest when no change is required. A producer is said to be in equilibrium when it has no inclination to expand or to contract its output. This state either reflects maximum profits or minimum losses. The conditions of producer's equilibrium can be explained through the MR-MC approach. In this approach, the producer attains equilibrium where the following two conditions are fulfilled.

(i) MR = MC:
As long as MC is less than MR, it is profitable for the producer to go on producing more because it adds to its profits. He stops producing more only when MC becomes equal to MR.

(ii) MC is greater than MR after MC = MR output level:
When MC is greater than MR after equilibrium, it means producing more will lead to decline in profits.

 Units of Output MR MC 1 10 22 2 10 15 3 10 10 4 10 12 5 10 15

According to the schedule, at 3 units of output, both the conditions of producer’s equilibrium are satisfied. That is, at this level, both MR and MC are equal to 10 and MC is rising. Thus, the producer’s equilibrium is 3 units of output.
1258 Views

14.

The price elasticity of demand for a good is − 0.4. If its price increases by 5 percentage, by what percentage will its demand fall? Calculate.

849 Views

15.

Explain any two factors that affect the price elasticity of demand. Give suitable examples.

594 Views

16.

Giving reasons, state whether the following statements are true or false.
A monopolist can sell any quantity he likes at a price.

1503 Views

17. Giving reasons, state whether the following statements are true or false.
When equilibrium price of a good is less than its market price, there will be competition among the sellers.
983 Views

18.

Explain the Law of Variables Proportions with the help of total product and marginal product curves.

2620 Views

19.

Explain consumer’s equilibrium with the help of Indifference Curve Analysis.

2637 Views

20.

Explain the relationship between prices of other goods and demand for the given period.

2355 Views