why should marginal cost be rising at the point of equilibrium?
what are abnormal profits and abnormal loss?
At the point of equilibrium the Marginal Cost must be rising. If the firm is producing at an output level where the MC is falling, then this implies that it can further increase the profit by slightly raising the level of output. With a slight increase in the output the will firm will face a price that exceed MC.This implies that the profit can be maximised by increasing output level. Equilibrium is established at the point where the MR is equal to MC and MC is rising. Any deviation from this point leaves the firm with lower profits or losses.
Abnormal profits refers to a situation where the price exceeds the minimum of the Short Run Average Cost.
As against this, abnormal profits refers to a situation where the price falls short of the minimum of Short Run Average Cost