Question

Calculate 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

Answer 1

Answer:

QUANTITY SOLD

TR

MR AR

0 0 0 -

1 10 10 10

2 20 10 10

3 30 10 10

4 40 10 10

5 50 10 10

6 60 1O 10

Total money receipts of a firm from the sale of a given output is called total revenue.

TR = OUTPUT*PRICE

Marginal revenue is the change in total revenue when one more unit of a commodity is sold.

MR= change in TR/change in quantity sold

Average revenue refers to revenue per unit of output.

AR=TR/Q

If AR is constant, MR is equal to AR. Both are indicated by the same horizontal straight line(a situation of perfect competition)

Q