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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