Question

Find a fall in market demand for the commodity when TR of the monopoly firm reduces from Rs. 5000 to Rs. 4500 and $AR$ increases from $Rs.50$ to $Rs.90$.

Answer 1

$TR=Rs.5000,P=AR=Rs.50$
$TR=P\times Q$
$Q=\frac{TR}{P}$
$=\frac{5000}{50}=100$
When $TR=RS.4500,P(=AR)=Rs.90$
$Q=\frac{4500}{90}=50$
Market demand falls by $(50-100)units=50units$.