How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
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.
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
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....
Comments