Producer Behaviour and Supply-Producer's Equilibrium (CBSE Class-12 Economics): Questions 1 - 6 of 12

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Question number: 1

» Producer Behaviour and Supply » Producer's Equilibrium

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On the basis of the information given below, determine the level of output at which the producer will be in equilibrium. Use the marginal cost – marginal revenue approach. Give reasons for your answer.

table shows average revenue and total cost of no. of output

it shows the effect of increase or decrease in output on total cost

Output (Units)

Average Revenue (Rs)

Total Cost (Rs)

1

7

8

2

7

15

3

7

21

4

7

26

5

7

33

6

7

41

Question number: 2

» Producer Behaviour and Supply » Producer's Equilibrium

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Define ‘producer’s equilibrium’. Explain the conditions of producer’s equilibrium in terms of Total Cost and Total Revenue. Use diagram.

Question number: 3

» Consumer's Equilibrium and Demand » Consumer's Equilibrium

» Producer Behaviour and Supply » Producer's Equilibrium

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There is a simultaneous ‘decrease’ in demand and supply of a commodity. When will it result in:

(a) No change in equilibrium price.

(b) A fall in equilibrium price.

Use diagrams.

Question number: 4

» Producer Behaviour and Supply » Producer's Equilibrium

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Explain the reasons for: (i) increasing returns to a factor and (ii) increasing returns to scale.

Question number: 5

» Producer Behaviour and Supply » Producer's Equilibrium

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Explain the changes that will take place in the market for a commodity if the prevailing market price is less than the equilibrium price.

Question number: 6

» Consumer's Equilibrium and Demand » Consumer's Equilibrium

» Producer Behaviour and Supply » Producer's Equilibrium

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There is a simultaneous ‘decrease’ in demand and supply of a commodity. Explain its effect on equilibrium price.

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