Why is equilibrium not necessarily established at full employment? Keynes contradicted the views of the classical economists. In the figure given below OY, represents the level of National income at which there is full employment in the economy.
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The necessary condition of equilibrium is the equality of marginal cost and marginal revenue. The same condition applies to monopoly also. Therefore equilibrium of a monopoly firm is established at a point where MC is equal to MR.
Market is the characteristic phenomenon of economic life. Price is a powerful regulator. Market in Economics refers to a group of buyers and sellers in sufficiently close contact with one another that exchange takes place among them. Market refers to a commodity.