Is a producer in equilibrium under the following situations?
(i) When Marginal Revenue is greater than Marginal Cost.
(ii) When Marginal Revenue is equal to Marginal Cost.
Give reasons for your answer.
(i) No, if MR > MC, then it means that a producer is able to earn abnormal profits. This will motivate him to increase his production.
(ii) Yes, a producer will be in equilibrium where MR = MC and MC should be rising at this point. He will get maximum profit here.