Q21
Dear student,
Yes, as an entrepreneur we would agree with the statement.
According to the MR-MC approach, a producer's profits are maximised at the point where the following two conditions are:
Thus, we can say that maximisation of profits implies equilibrium but equilibrium does not always imply profit maximisation.
Yes, as an entrepreneur we would agree with the statement.
According to the MR-MC approach, a producer's profits are maximised at the point where the following two conditions are:
- MR is equal to MC
- MC is rising at the point of intersection
Thus, we can say that maximisation of profits implies equilibrium but equilibrium does not always imply profit maximisation.