A producer strikes his equilibrium when the difference between TR and TC is maximised.

Question

Defend or refute the statement. Write ‘yes’ or ‘no’ with reason:

A producer strikes his equilibrium when the difference between TR and TC is maximised.

Answer 1

Yes. A producer strikes his equilibrium when he produces that amount of output at which the difference between total revenue and total cost is maximum. Because, gross profit = TR – TC.