Which of the following is/are correct regarding the shape of total revenue under perfect competition?
(i) TR curve is the straight line from the origin.
(ii) Its slopes is constant
(iii) TR curve is S-shaped
(iv) Its slopes change with the change in output

(i) and (ii) only

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(iii) and (iv) only

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(i) and (iii) only

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(ii) and (iv) only

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Solution

The correct option is A (i) and (ii) only
Perfect competition is a type of market where there are large number of buyers and sellers who deals in homogeneous product due to which no individual unit is able to influence the price of the product and the firms have to quote the price that prevails in the market.
Since the price of the product remains the same the Total Revenue curve is a straight line from the origin with a constant slope.

Suggest Corrections

Similar questions

State, with valid reasons, which of the following statements are true or false:

a. Average Revenue curve under the Perfect Competition is a downward sloping curve.

b. AFC curve is a rectangular hyperbola curve.

c. When MR is falling but positive, TR will also be falling and positive.

Comment on the shape of the MR curve in case the TR curve is a

(i) positively sloped straight line, passing through the origin

(ii) horizontal straight line.

R s . 15

10

T R

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