How Much Output should be Produced by the Firm? An Analysis

Muhammad Junaid Qureshi Umair Siddiqui, Hafiz Fasahat Naveed Cheema


In this study, the main objective of the firm is to determine output and price level; we have taken the time series data of the firm and have applied the ordinary least square technique. We find out the equilibrium point of the firm where marginal revenue is equal to marginal cost and at that point firm earn the maximum profit and we also determine the price level of the firm. The output level that the firm should produce would be of 3922 units, at this point its total cost is 1131611, total revenue is 1115890, marginal revenue is 308.6689, marginal cost is 308.6702 and optimal price is 284.5206.

Keywords: Price and Output Determination, Empirical Study, MR = MC

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ISSN (Paper)2224-5758 ISSN (Online)2224-896X

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