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Weighted Average Profits Method

What is the r...

Question

What is the relation between market price and marginal revenue of a price taking firm?

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Solution

Market price and average revenue of a price taking firm are equal. Both are indicated by a horizontal straight line. Because market price is constant for a price taking firm.

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What is the relation between market price and marginal revenue of a price-taking firm?

What is the relation between market price and average revenue of a price-taking firm?

What is the relation between market price and average revenue of a price taking firm?

Define marginal revenue. State the relation between marginal revenue and average revenue when a firm :

(i) is able to sell more quantity of output at the same price.

(ii) is able to sell more quantity of output only by lowering the price.

Explain the relation between marginal revenue and average revenue when a firm is able to sell more quantity of output :

(i) at the same price.

(ii) only by lowering the price.

OR

Explain the effect of the following on the supply of a commodity :

(a) Fall in the prices of factor inputs.

(b) Rise in the prices of other commodities.

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