How are the total revenue of a firm, mar | Class 12 Micro Economics Chapter The Theory of the Firm under Perfect Competition, The Theory of the Firm under Perfect Competition NCERT Solutions

Question:

How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?

Answer:

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 output sold.
Total revenue = Price Quantity of output sold
TR = P × Q
TR = PQ
In a perfectly competitive market the market price is given i.e. a firm acts as a price taker and cannot influence the price. Hence a particular firm can influence its TR by altering the quantity of output sold.


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Welcome to the NCERT Solutions for Class 12 Micro Economics - Chapter . This page offers a step-by-step solution to the specific question from Excercise 1 , Question 2: How are the total revenue of a firm, market price, and the quantity sold by the firm related to each....