Summarize the Production Optimum Condition in microeconomics

Economics Dec 13, 2020

Summarize the Production Optimum Condition in microeconomics. Include a graph in your response.

Expert Solution

Production optimum condition refers to the point where the demand for the commodity is equal to the supply of the commodity. It shows the quantity a producer is ready to sell at the given optimum price where the demand curve intersects the supply curve. At the equilibrium point, both producer and consumer are satisfied.

In the diagram below, the DD demand curve intersects the SS supply curve at point E. It gives the optimum quantity OQ and optimum price OP.

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