Marginal analysis
Key Questions
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Answer:
MR and MC are used to determine a firm's equilibrium.
Explanation:
Whatever be the market form, for a firm to be in equilibrium, the two conditions are to be satisfied.
1st order condition or necessary condition
MC = MR2nd order condition or sufficient condition
MC curve must cut the MR curve from below
(or)
At the point of equilibrium MC must be on the increase.Equilibrium under Perfect Competition
Equilibrium Under Monopoly