Question 23 of 36
Q.Differentiate between 'firm and industry'.
Tamil Nadu DgeTamil Nadu HSC First Year (DGE) Commerce Board 2023Subjective· 3mImportance★★★★★
64% · 23/36 Questions
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Start your 14-day free trial to unlock the full solution →A firm is one production unit under a single management; an industry is the collection of all firms producing the same or similar product.
In the Tamil Nadu HSC Class-11 Economics syllabus, distinguishing between a firm and an industry is basic to the theory of market structure.
| Basis | Firm | Industry |
|---|---|---|
| Meaning | A single, independently-managed unit of production | A group of firms producing the same or similar products |
| Size/scope | Smaller unit; part of an industry | Larger; made up of many firms |
| Decision-making | Takes its own output and price decisions | Represents the combined behaviour of all its firms |
| Equilibrium | Firm's equilibrium is where its own profit is maximum (MR = MC) | Industry equilibrium is where total demand = total supply of the product |
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