Q3 of 39 Page 1

Under imperfect competition, Average Revenue (AR) remains _________Marginal Revenue (MR). (Fill up the blank)

OR


‘‘For a firm to be in equilibrium, Marginal Revenue (MR) and Marginal Cost (MC) must be _________ and beyond that level of output Marginal Cost must be _________.’’ (Fill up the blank)


Under imperfect competition, Average Revenue (AR) remains __above__

Marginal Revenue (MR).


Marginal revenue is the addition to total revenue by selling one more unit of the commodity. Average revenue is the revenue per unit of the commodity sold. Unlike under perfect competition, a firm under imperfect competition such as under monopoly can sell more only by lowering its price. Therefore, the average revenue curve is downward sloping and its corresponding marginal revenue curve lies below it.


OR


‘‘For a firm to be in equilibrium, Marginal Revenue (MR) and Marginal Cost (MC) must be equal and beyond that level of output Marginal


Cost must be higher.’’


Conditions for a firm to be in equilibrium:


- Marginal cost should be equal to marginal revenue.


- Its profit should be maximum.


More from this chapter

All 39 →
1

The Total Revenue earned by selling 20 units is < 700. Marginal Revenue earned by selling 21st unit is < 70 . The value of Total Revenue

earned by selling total 21 units will be ____________. (Choose the correct alternative)


 2

In the given figure X1Y1 and X1Y2 are Production Possibility Curves in two different periods T1 and T2 respectively for Good X and Good Y.

A1 and A2 represent actual outputs and P1 and P2 represent potential outputs respectively in the two time periods.



The change in actual output of Goods X and Y over the two periods


would be represented by a movement from _________ . (Fill up the blank)


(a) A2 to P2


(b) A1 to P2


(c) P1 to A2


(d) A1 to A2


OR


The Marginal Rate of Transformation (MRT) is constant. The Production


Possibility Curve, so formed, would be __________________ to the origin.


 4

If the supply curve is a straight line parallel to the vertical axis (Y-axis),

the supply of the good is called _________. (Fill up the blank)


(a) Unitary Elastic Supply


(b) Perfectly Elastic Supply


(c) Perfectly Inelastic Supply


(d) Perfectly Elastic Demand


 5

Distinguish between positive economics and normative economics, with

suitable examples.