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4. The Theory of the Firm under Perfect Competition
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Q24 of 27 Page 66

There are three identical firms in a market. The following table shows the supply schedule of firm 1. Compute the market supply schedule.











































Price (Rs)



SS1 (units)



0



0



1



0



2



2



3



4



4



6



5



8



6



10



7



12



8



14










































































Price (Rs)



SS1 (units)



SS2 (units)



SS3 (units)



Market Supply


= SS1 + SS2 + SS3



0



0



0



0



0



1



0



0



0



0



2



2



2



2



6



3



4



4



4



12



4



6



6



6



18



5



8



8



8



24



6



10



10



10



30



7



12



12



12



36



8



14



14



14



42




More from this chapter

All 27 →
22

Consider a market with two firms. The following table shows the supply schedules of the two firms: the SS1 column gives the supply schedule of firm 1 and the SS2 column gives the supply schedule of firm 2. Compute the market supply schedule.











































Price (Rs)



SS1 (kg)



SS2 (kg)



0



0



0



1



0



0



2



0



0



3



1



1



4



2



2



5



3



3



6



4



4


23

Consider a market with two firms. In the following table, columns labelled as SS1 and SS2 give the supply schedules of firm 1 and firm 2 respectively. Compute the market supply schedule.





















































Price (Rs)



SS1 (kg)



SS2 (kg)



0



0



0



1



0



0



2



0



0



3



1



0



4



2



0.5



5



3



1



6



4



1.5



7



5



2



8



6



2.5


25

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?

26

The market price of good changes from Rs 5 to Rs 20. As a result, the quantity supplied by a firm increases by 15 units. The price elasticity of the firm’s supply curve is 0.5. Find the initial and final output levels of the firm.

Questions · 27
4. The Theory of the Firm under Perfect Competition
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
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