Nisha Sharma posted an Question
October 01, 2021 • 10:54 am 30 points
  • UGC NET
  • Commerce

Explain price and equilibrium determination under monopoly

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  • Priya sarda

    According to economic theory, a firm should expand production until the point where marginal cost is equal to marginal revenue. According to the cost-benefit analysis, a company should continue to increase production until marginal revenue is equal to marginal cost.

  • Priya sarda best-answer

    The Equilibrium level in monopoly is that level of output in which marginal revenue equals marginal cost. The producer will continue producer as long as marginal revenue exceeds the marginal cost. At the point where MR is equal to MC the profit will be maximum and beyond this point the producer will stop producing. According to economic theory, a firm should expand production until the point where marginal cost is equal to marginal revenue. According to the cost-benefit analysis, a company should continue to increase production until marginal revenue is equal to marginal cost.

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    why he will stop producing when he is getting more profits

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