Class 11 Economics Important Chapter 9 Producer’s Equilibrium

Class 11 Economics Important Chapter 9 Producer’s Equilibrium Solutions English Medium As Per AHSEC New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 11 Economics Important Solutions and select need one. AHSEC Class 11 Economics Additional Notes English Medium Download PDF. HS 1st Year Economics Important Solutions in English.

Class 11 Economics Important Chapter 9 Producer’s Equilibrium

Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. Assam AHSEC Board Class 11 Economics Additional Question Answer are part of All Subject Solutions. Here we have given HS 1st Year Economics Important Notes in English for All Chapters, You can practice these here.

Producer’s Equilibrium

Chapter: 9

PART – A : MICROECONOMICS

IMPORTANT QUESTION AND ANSWER

Short Type Question and Answer:

1. What is meant by the break-even point in production?

Ans: It is the level of output where total revenue equals total cost and the firm earns only normal profits.

2. At the break-even point, what type of profit does the firm earn?

Ans: The firm earns only normal profit, which is considered part of the cost of production.

3. What does a position above the break-even point on the TR-TC diagram indicate?

Ans: It indicates the firm is earning supernormal (abnormal) profits.

4. What does a position below the break-even point indicate for a firm?

Ans: It indicates the firm is making losses.

5. Can a firm operate below the break-even point in the short run?

Ans: Yes, if the price covers at least the variable costs.

6. What is the loss minimisation condition for a firm in the short run?

Ans: The firm should continue production as long as price is greater than average variable cost.

7. What costs must a firm bear even if it stops production in the short run?

Ans: Fixed costs.

8. When will a firm shut down production in the short run?

Ans: When the market price falls below average variable cost.

9. At the shut-down point, what is the relationship between TR and TVC?

Ans: Total Revenue equals Total Variable Cost.

10. What is the situation of losses at the shut-down point?

Ans: The firm incurs a loss equal to its fixed costs.

11. Why does the shut-down point indicate loss minimisation?

Ans: Because the firm is covering its variable costs and minimising losses to the amount of fixed costs.

12. What does P = AVC indicate in the context of the shut-down point?

Ans: It means the price is just sufficient to cover the average variable cost per unit.

13. In the short run, why might a firm continue producing even if it incurs losses?

Ans: To cover variable costs and part of the fixed costs, thus reducing the total loss.

14. What happens if the price is less than AVC?

Ans: The firm will stop production because it cannot cover its variable costs.

15. Which cost curves are usually shown along with MC in the shut-down diagram?

Ans: Average Cost (AC) and Average Variable Cost (AVC) curves.