A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increase to Rs 15

ed = -0.2 [Note that ed = -2. Hence we need not prefix ed to (-2)]  Percentage change in price = 5% ed = (percentage change in demand)/(percentage change in price) 0.2 =  (percentage...

Total revenue is defined as the total sales proceeds of a producer by selling corresponding level of output. In other words, it is defined as price times the quantity of...

Average Revenue is defined as the revenue per unit of the output sold. It is expressed as the ratio between total revenue and the output sold. AR = TR/Q We know that, TR...

Elasticity of Supply, es = 0.5 Initial Price, P1 = Rs 5 Final price, P2 = Rs 20 ΔP = P2 - P1 = 20 - 5 ΔP = 15 ΔQ = 15 es = ΔQ/ΔP x P1/Q1 0.5...

Initial Price, P1 = Rs 10 Initial Output, Q1 = 4 units Final Price, P2 = Rs 30 ΔP = P2 - P1 = Rs 30 - 10 = Rs 20 Elasticity of supply,es =...

The correct answer is (C) H

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.

Average revenue is constant at all levels of output in a market in which a firm can sell any quantity of a good at a given price.

For a price taking firm, market price is equal to marginal revenue.

Total revenue is the multiplication of quantity sold and market price, whereas market price is the ratio of total revenue and quantity sold. TR = P X Q P = △TR/△Q