Define total revenue.

2

(a)

The amount received from the sale of given amount of output is known as Total Revenue.
For example, if a firm sells 100 chairs at a price of Rs 200 per chair, the total revenue will be 100 Chairs x Rs 200 =Rs 20,000.

Define marginal revenue.

2

(a)

The amount received from the sale of additional unit of output is known as Marginal Revenue.

When TR falls, what happens to MR?

2

(a)

MR is negative.

What is the behaviour of average revenue in a market in which a firm can sell more only by lowering the price?

2

(a)

Average revenue will fall.

When is price (AR) different from MR?

2

(a)

Price (AR) is different from MR when more units of a commodity can be sold by reducing the price as in monopoly and monopolistic competition.

Define revenue.

2

(a)

Revenue of a firm refers to receipts from the sale of output in a given period.

Compute the total revenue, marginal revenue and average revenue schedules in following table. Market price of each unit of goods is Rs 10.

Quantity sold	0	1	2	3	4	5	6
TR(Rs)
AR(Rs)
MR(Rs)

2

(a)

Whatwouldbetheshapeofthe demand curve so that the total revenue curve is
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?

3

(a)

Comment on the shape of the MR curve in case the TR curve is a
(i) positively sloped straight line,
(ii) horizontal straight line.

3

(a)

Calculate TR and MR from the following data.

units sold	1	2	3	4	5	6
AR(Rs)	25	23	21	19	18	15

3

(a)

Complete the following table.​​​​​​​​​​​​​​

Price(Rs)	8	6	4	2
Output (units)	1	2	3	4
TR(Rs)	-	-	-	-
MR(Rs)	-	-	-	-

3

(a)

Complete the following table.

Output (units)	1	2	3	4
AR(Rs)	-	-	11	-
MR(Rs)	15	-	-	3
TR(Rs)	-	26	-	-

3

(a)

Calculate TR, MR and AR.

Price(Rs)	4	5	6	7
Units sold	1	2	3	4

3

(a)

Explain the relation between marginal revenue and average revenue when a firm is able to sell more quantity of output: (i) at the same price. (ii) only by lowering the price.

3

(a)

What is revenue of a firm? Give meaning of average revenue and marginal revenue. What happens to average revenue when marginal revenue is: (i) Greater than average revenue; (ii) equal to average revenue; (iii) less than average revenue?

3

(a)

Calculate TR, AR and MR from the following data.

Units sold	10	9	8	7	6	5	4
Price(Rs)	1	2	3	4	5	6	7

3

(a)

Calculate TR, AR and MR from the following data.

Price(Rs)	1	2	3	4	5	6	7
units sold	100	90	80	70	60	50	40

3

(a)

The demand function of a commodity x is Q_x = 12 - P_x (where Q_x = the quantity demanded of a commodity x and P_x = price of the commodity x). Derive the TR and MR schedules when the price of commodity varies from Rs 12 to Rs 1.

3

(a)

What is the relationship between TR and Price line when price is constant?

3

(a)