Given below is the cost schedule of a product produced by a firm. The market price per unit of the product at all levels of output is Rs. 12. Using marginal cost and marginal revenue approach, find out the level of equilibrium output. Give reasons for your answer :

output (units)	1	2	3	4	5	6
average cost (in RS)	12	11	10	10	10.4	11

The producer’s equilibrium refers to the situation in which he maximises his profits. A producer achieves an equilibrium when two conditions are satisfied.
i. MR = MC
ii. MC is rising or the MC curve cuts the MR curve from below.

This table indicates that the two conditions of equilibrium are satisfied only when 5 units of output are produced. It is here that
(i) MR = MC = Rs 12 and
(ii) MC is rising.
The market price per unit of the product is Rs 12. Thus MR = 12.
the first an the other conditions are being met at unit 5. Thus equilibrium output is 5 units.