Question

Information about a firm is given in the following

Output	Total Revenue	Total Cost
1	6	7
2	12	13
3	18	17
4	24	23
5	30	31

Find out the equilibrium level of output in terms of MC & MR. Give reasons for your answer.

Answer 1

Out-put	TR	TC	MR	Mc
1	6	7	6	7
2	12	12	6	5
3	18	17	6	5
4	24	23	6	6
5	30	31	6	18

Equilibrium quantity is 4. At this level of output MC = MR & MC cuts MR from below.