Practice Revenue (4.2) - The Theory of the Firm under Perfect Competition
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Revenue

Practice - Revenue

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Practice Questions

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Question 1 Easy

Define total revenue.

💡 Hint: Think about how revenue is affected by price and quantity.

Question 2 Easy

What is the relationship between Average Revenue and Price in perfect competition?

💡 Hint: Consider the equality of price and revenue per unit.

4 more questions available

Interactive Quizzes

Quick quizzes to reinforce your learning

Question 1

What is the formula for Total Revenue?

TR = p × q
TR = p + q
TR = p - q

💡 Hint: Recall the multiplication of price and quantity.

Question 2

In perfect competition, Average Revenue equals what?

True
False

💡 Hint: Think about price structure in competitive markets.

1 more question available

Challenge Problems

Push your limits with advanced challenges

Challenge 1 Hard

A firm operates in a perfectly competitive market selling pencils at Rs 5 each. If it sells 100 pencils, calculate total revenue, average revenue, and marginal revenue when it decides to sell one more pencil.

💡 Hint: Use the revenue formulas you’ve learned.

Challenge 2 Hard

Discuss why a perfectly competitive firm cannot sustain a price above the market price for long. What would happen to revenue?

💡 Hint: Consider market dynamics and the role of competition.

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