Welcome to the NCERT Solutions for Class 12 Micro Economics - Chapter The Theory of the Firm under Perfect Competition. This page offers a step-by-step solution to the specific question from Exercise 1, Question 25: . With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.
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?
At price P1 = Rs 10
TR1 = P1 × Q1 = 50
Total revenue,
=
=
= Q1 = 5 units
At price, P2 = Rs 15
Total revenue, TR2 = P2 × Q2 = 150
= Q2 =
= Q2 =
= Q2 = 10 units
es =
Elasticity of supply,
∆Q = Q2 – Q1 = 10 – 5 =5
P = P1 – P2 = 15 – 10 = 5
es =
es = 2
The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising level of output.
| Output | TC (Rs.) |
|---|---|
| 0 1 2 3 4 5 6 7 8 9 10 |
5 15 22 27 31 38 49 63 81 101 123 |
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Read MoreWelcome 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 25: A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increases....
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