Well-structured ECS2606 Assignment 1 (ANSWERS) Semester 2 2023 - DISTINCTION GUARANTEED. (DETAILED ANSWERS - DISTINCTION GUARANTEED!). 1. An industry supply curve can be derived under competitive conditions, where each firm receives the
same output price. Considering this fact, what is the relatio...
ECS2606
Assignment 1 Semester 1 2023
Unique Number: 622138
Due Date: 11 August 2023
QUESTION 1
The equimarginal principle states that in order to maximize utility or profit, one should
allocate resources in such a way that the marginal benefit (MB) of each resource is equal.
In the context of the industry supply curve, the equimarginal principle implies that each firm
should produce at a level where the marginal cost (MC) of production equals the output price.
Under competitive conditions, each firm receives the same output price, which means that
the marginal benefit of production is identical for all firms. By setting MC equal to the output
price, firms are equating their cost of production with the benefit they receive from producing
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