As a monopolist increases the price of a good, what happens to the total revenue (TR)?

TR increases

No worries! We‘ve got your back. Try BYJU‘S free classes today!

TR decreases

No worries! We‘ve got your back. Try BYJU‘S free classes today!

TR first increases and then decreases

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

TR first decreases and then increases

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C
TR first increases and then decreases

As the price increases, TR first increases due to price effect and then decreases due to quantity effect.

Suggest Corrections

Similar questions

For a monopolist, the total revenue (TR) _________.

Q. Complete the following table of a monopolistically competitive firm:

Output (Units)	Price (Rs.)	Marginal Revenue (Rs.)	Total Revenue (Rs.)
1	$-$	10	$-$
2	9	$-$	$-$
3	$-$	$-$	24
4	$-$	4	$-$

A firm earns a revenue of Rs. 50 when the market price of a good is Rs. 10. The market price increases to Rs. 15 and the firm now earns a revenue of Rs. 150. What is the price elasticity of the firm's supply curve?

Q. Complete the following table of a monopolistically competitive firm:

Output (Units)	Price (Rs.)	Total Revenue (Rs.)	Marginal Revenue (Rs.)
1	$-$	18	$-$
$-$	16	$-$	14
3	$-$	42	$-$
4	12	$-$	$-$
$-$	10	$-$	2

Q. What happens when the price of good 1 increases but the income and price of good 2 remains the same?

Join BYJU'S Learning Program

As a monopolist increases the price of a good, what happens to the total revenue (TR)?

The correct option is C TR first increases and then decreases As the price increases, TR first increases due to price effect and then decreases due to quantity effect.

The correct option is C
TR first increases and then decreases

As the price increases, TR first increases due to price effect and then decreases due to quantity effect.