12th Class Economics Solved Paper - Economics 2017 Delhi Set-I

  • question_answer
    Given below is the cost schedule of a product produced by a firm. The market price per unit of the product at all levels of output is Rs 12. Using marginal cost and marginal revenue approach, find out the level of equilibrium output. Give reasons for your answer:
    Output (Units) 1 2 3 4 5 6
    Average (Cost) (Rs) 12 11 10 10 10.4 11

    Answer:

    Output AR (Rs.) TC (Rs.)
    1 20 22
    2 20 42
    3 20 60
    4 20 76
    5 20 96
    6 20 120
    MR MC
    20 22
    20 20
    20 22
    20 26
    20 20 Equilibrium
    20 36
                At \[{{5}^{th}}\] unit of output, the producer will be in equilibrium because at this unit, MR is equal to MC and MC curve cuts MR from below.


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