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 26: . 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.
The market price of a 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.
Elasticity of supply ex = 0.5
Initial price, P1 = Rs 5
Final price, P2 =Rs 20
∆P = P2 – P1
= 20 – 5
∆P = 15
∆Q = 15
es =
0.5 =
0.5 =
Q1 =
Initial quantity = 10 units
Final quantity, Q2 = ∆Q + Q1
= 15 + 10
Therefore, Q2 = 25 units
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 26: The market price of a good changes from Rs 5 to Rs 20. As a result, the quantity supplied by a firm ....
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