Question

How are the TR of a firm,market price and quantity sold by the firm related to each other ?????

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Answer 1

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Answer 2

firm, under perfect competition, behaves as a ‘price-taker’ in the sense that no single firm can influence the price of the product. Under this situation, the TR curve is a rising straight line from the origin. TR rises in direct proportion to output. The TR curve has been drawn in Fig. 3.32 whose slope is the given price in the market.



In any branch of imperfect competition (say, monopoly or monopolistic competition or oligopoly), a firm behaves as the ‘price- maker’ in the sense that it can influence the price of the product. A firm has to reduce the price of the product if it wants to sell more. So TR must rise.