Production of Goods and Services · SHS3 Economics

Lesson notes

Learning Objectives

Indicator: 3.2.1.LI.1 - Determine the equilibrium situation in a firm and in an industry.

By the end of the lesson, learners can:

Define equilibrium of a firm as the point where profit is maximised, using the MR = MC rule.
Determine the equilibrium output and price of a firm using both total revenue/total cost and marginal revenue/marginal cost approaches with given data.
Explain the distinction between equilibrium of a firm and equilibrium of an industry, including why all firms in a perfectly competitive industry face the same price.
Identify the short-run equilibrium position of a firm in a perfectly competitive market using a cost and revenue diagram described in words.
Analyse, using a simple numerical example, why a firm that produces where MR is greater than MC can increase profit by expanding output.

Sign in with your phone number to read the full note and download the GES plan - free.

Sign in with phone number

Curriculum details

Strand: Firms' Innovative Decision Making (Strand 2)
Sub-strand: Production of Goods and Services (2.1)
Content standard: 3.2.1.CS.2 - Demonstrate knowledge and understanding of Equilibrium of firms in an Industry and how prices are discriminated. 3.2.1.LO.1 Describe Economies of scale and Diseconomies of scale. 3.2.1.LO.2 Compare Economies of scale to Diseconomies of scale.
Indicator: 3.2.1.LI.1 - Determine the equilibrium situation in a firm and in an industry.
Suggested placement: Semester 1, Week 10 (Week 10 of the year)
Our suggestion, laid out in curriculum order across three terms of twelve weeks. NaCCA does not fix the week, so follow your school's scheme of learning.
Curriculum reference: NaCCA curriculum document, p. 100

Exemplars (from the NaCCA curriculum)

Talk for Learning Approaches (TfL): Develop activities leading to quality discussions on the equilibrium of the firm and industry. Pay attention to learners approaching proficiency. Learners learn how to respect individuals of different beliefs, religions, and cultures. Learn to tolerate different views and be assertive as class discussion ensues.
Assessment (3.2.1.AS.1). The document marks these depth-of-knowledge levels for this indicator: Level 4 Extended critical thinking and reasoning.
Teaching and Learning Resources:
- Pens,
- Exercise books
- Markers
- White board
- Computers
- Internet,
- Search engines
- Projectors
- ICT lab