1) Firm is an unit of an industry. 1) Industry is a group of firm which are producing a homogeneous products.


2) Firm is in equilibrium when it has not tendency to increase / decrease its output 2) An industry is in equilibrium when all the firms are operating  and no new firm has to enter or an old firm to leave the industry.
3) Condition: A firm is in equilibrium when its marginal cost is equal to marginal revenue and at the point of equilibrium, MC curve cut MR curve from below Industry equilibrium is determined by conditions of demand and supply.  The industry will be in the condition of equilibrium when All firms are in equilibrium, no new firm enter and no old firm leave the industry.


4) Period:  From the point of view of time, firm can be equilibrium both in short and long runs if MC = MR. In industry will be in the position of equilibrium in the long run because all the possible adjustments can be made.  Long run equilibrium of an industry is more stable.
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