Sandeep Garg Class 11 Microeconomics Solutions Chapter 8 Producer’s Equilibrium is explained by the expert Economics teachers from the latest edition of Sandeep Garg Microeconomics Class 11 textbook solutions. We at CoolGyan’S provide Sandeep Garg Economics Class 11 Solutions to give comprehensive insight about the subject to the students.
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Sandeep Garg Solutions Class 11 – Chapter 8 – Part A – Microeconomics
Question 1
What is a Profit?
Ans: Profit refers to the excess of receipts from the sale of goods over the expenditure incurred on producing them.
Question 2
Define Producer’s Equilibrium.
Ans: Producer’s Equilibrium refers to that price and output combination, which brings maximum profit to the producer and profit declines as more is produced.
Question 3
On the basis of the data given below, determine the level of output at which the producer will be in equilibrium. Use the marginal cost-marginal revenue approach.
| Output (Units) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| Average Revenue (₹) | 7 | 7 | 7 | 7 | 7 | 7 | 7 |
| Total Cost (₹) | 8 | 15 | 22 | 28 | 33 | 40 | 48 |
Solution:
| Output (Q) (in units) | AR (₹) | TC (₹) | MC (₹) (_{MC_{n}} = _{TC_{n}}- _{TC_{n-1}}) | MR (₹) (_{MR_{n}} = _{TR_{n}}- _{TR_{n-1}}) |
| 1 | 7 | 8 | 8 | 7 |
| 2 | 7 | 15 | 7 | 7 |
| 3 | 7 | 22 | 7 | 7 |
| 4 | 7 | 28 | 6 | 7 |
| 5 | 7 | 33 | 5 | 7 |
| 6 | 7 | 40 | 7 | 7 |
| 7 | 7 | 48 | 8 | 7 |
Question 4
What are the two methods for determination of Producer’s Equilibrium?
Ans: The two methods for determination of producer’s equilibrium are,
- Total Revenue and Total Cost Approach (TR – TC Approach)
- Marginal Revenue and Marginal Cost Approach (MR – MC Approach)
Question 5
What are the conditions needed for the Producer’s Equilibrium?
Ans: The conditions needed for the producer’s equilibrium are,
- MC=MR
- MC is greater than MR after the MC = MR output level
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Also Read: What is the condition for producer equilibrium?