Equilibrium Condition

Equilibrium Condition

Equilibrium Condition for Monopoly Firm : A monopolist firm has equilibrium at the point where two following conditions are fulfilled: 

1. Marginal revenue

 2. MC should cut MR from below. 

="Marginal cost Equilibrium of Monopolist in Short Period :

 In short run, a monopolist may face three conditions: 
1. Abnormal profit,
 2. Normal profit ie no profit and no loss, 

3. Firm in loss.
 LAbnormal Profit: 
Abnormal profit in monopolist is that condition in which average revenue is greater than average cost ie, AR>AC

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