The Theory Of The Firm Under Perfect Competition
Class 12 · Economics · 25 Questions
What are the characteristics of a perfectly competitive market?
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
What is the 'price line'?
Why is the total revenue curve of a price-taking firm an upward-sloping straight line? Why does the curve pass through the origin?
What is the relation between market price and average revenue of a price-taking firm?
What is the relation between market price and marginal revenue of a price-taking firm?
What conditions must hold if a profit-maximising firm produces positive output in a competitive market?
Can there be a positive level of output that a profit-maximising firm produces in a competitive market at which market price is not equal to marginal cost? Give an explanation.
Will a profit-maximising firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.
Will a profit-maximising firm in a competitive market produce a positive level of output in the short run if the market price is less than the minimum of AVC? Give an explanation.
Will a profit-maximising firm in a competitive market produce a positive level of output in the long run if the market price is less than the minimum of AC? Give an explanation.
What is the supply curve of a firm in the short run?
What is the supply curve of a firm in the long run?
How does technological progress affect the supply curve of a firm?
How does the imposition of a unit tax affect the supply curve of a firm?
How does an increase in the price of an input affect the supply curve of a firm?
How does an increase in the number of firms in a market affect the market supply curve?
What does the price elasticity of supply mean? How do we measure it?
Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is Rs 10.
| Quantity Sold | TR | MR | AR |
|---|---|---|---|
| 0 | |||
| 1 | |||
| 2 | |||
| 3 | |||
| 4 | |||
| 5 | |||
| 6 |
The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising level of output.
| Output | TC (Rs) |
|---|---|
| 0 | 5 |
| 1 | 15 |
| 2 | 22 |
| 3 | 27 |
| 4 | 31 |
| 5 | 38 |
| 6 | 49 |
| 7 | 63 |
| 8 | 81 |
| 9 | 101 |
| 10 | 123 |