SELECT * FROM question_mgmt as q WHERE id=5552 AND status=1 SELECT id,question_no,question,chapter FROM question_mgmt as q WHERE courseId=3 AND subId=60 AND chapterId=611 and ex_no='1' AND status=1 ORDER BY CAST(question_no AS UNSIGNED)

Question:

Can there be a positive level of output that a profit-maximising firm produces in a competitive market at which market price is not equal to marginal cost? Give an explanation.

Answer:

There cannot be any positive level of output that a firm producers at which price is not equal to MC. Let us evaluate the following two cases where price is not equal to MC.

Case A: If P MC
At output Oq1, price is Kq1 while the MC is Lq1. So Oq1 is not the profit maximising output. This is due to the fact that the firm can increase its profit level by expanding its output to Oq2.

Case B: If P
At output Oq3 price is Hq3 and MC is Gq3 . so Oq3 is not the profit maximising output . this is because the firm can increase its profit by reducing its output level to Oq2. Thus at profit maximising point price must be equal to MC and it cannot be greater or lesser than MC.


< Previous Question

Next Question >

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='60' AND ex_no!=0 AND status=1 and id!=5552 ORDER BY views desc, last_viewed_on desc limit 0,10

  • Popular questions of class 12 Micro Economics

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='60' AND ex_no!=0 AND status=1 and id!=5552 ORDER BY last_viewed_on desc limit 0,10

  • Recently Viewed Questions of Class 12 Micro Economics

Comments

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

Comment(s) on this Question


Important links

Quick Links

Resources

Support