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A firm earns by selling the good that it produces in the market.

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Important Questions on The Theory of the Firm under Perfect Competition

HARD
Economics>Microeconomics>The Theory of the Firm under Perfect Competition>Revenue
What is the relation between market price and average revenue of a price taking firm ?
EASY
Economics>Microeconomics>The Theory of the Firm under Perfect Competition>Revenue
What is the ‘price line’?
HARD
Economics>Microeconomics>The Theory of the Firm under Perfect Competition>Revenue
Why is the total revenue curve of a price-taking firm an upward-sloping straight line? Why does the curve pass through the origin?
EASY
Economics>Microeconomics>The Theory of the Firm under Perfect Competition>Revenue
How is the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
HARD
Economics>Microeconomics>The Theory of the Firm under Perfect Competition>Revenue
What is the relation between market price and marginal revenue of a price taking firm?
HARD
Economics>Microeconomics>The Theory of the Firm under Perfect Competition>Revenue

Compute the total revenue, marginal revenue, and average revenue schedules in the following table. The Market price of each unit of the good is Rs10.

Quantity Sold TR MR AR
0      
1      
2      
3      
4      
5      
6      

 

HARD
Economics>Microeconomics>The Theory of the Firm under Perfect Competition>Revenue
The following table shows the total revenue and total cost schedules of a competitive firm. Calculate the profit at each output level. Determine also the market price of the good
Quantity Sold TR (Rs) TC (Rs) Profit
0 0 5  
1 5 7  
2 10 10  
3 15 12  
4 20 15  
5 25 23  
6 30 33  
7 35 40  
HARD
Economics>Microeconomics>The Theory of the Firm under Perfect Competition>Revenue
Which among the following is true in the context of the average revenue (AR) of the firm?