Answer the following questions based on the given table. Unit of goods Price/AR (Rs.) TR (Rs.) MR (Rs.) : :…

Question

Answer the following questions based on the given table. Unit of goods Price/AR (Rs.) TR (Rs.) MR (Rs.) : : : : 1 12 2 11 3 10 4 9 5 8 6 7 7 6 8 5 i) Complete the above table. [4] ii) Draw total, average and marginal revenue curves from the completed table. [3] iii) Identify the structure of market. [1]

Padhai · Accepted Answer

i) Completion of the table

Unit of goods (Q)	Price / AR (Rs.)	TR (Rs.)	MR (Rs.)
1	12	12	12
2	11	22	10
3	10	30	8
4	9	36	6
5	8	40	4
6	7	42	2
7	6	42	0
8	5	40	‑2

Working steps

Total Revenue (TR) is the product of price (AR) and quantity sold.
$T R = P \times Q$
Example for Q = 3: $T R = 10 \times 3 = 30$ Rs.
Marginal Revenue (MR) is the change in total revenue when one more unit is sold.
$M R_{i} = \frac{T R _{i} - T R _{i - 1}}{Q _{i} - Q _{i - 1}}$
For the second unit: $M R_{2} = \frac{22 - 12}{2 - 1} = 10$ Rs.
The first‑unit MR equals the first‑unit TR because $T R_{0} = 0$ .

All calculations are shown in the table; the final values are highlighted in bold.

ii) Revenue curves

TR, AR and MR curves derived from the completed table

Perfect competition: AR = MR = Demand curve (linear example)

Explanation of the graph

TR curve rises initially because each extra unit adds positive revenue, reaches a maximum at Q = 6 (42 Rs), and then falls as the price falls sharply.
AR curve is a straight downward‑sloping line because price falls by Rs 1 for each additional unit – the firm faces a downward‑sloping demand curve.
MR curve lies below the AR curve, falling twice as fast. It becomes zero at Q = 7 and turns negative at Q = 8, indicating that producing beyond the seventh unit reduces total revenue.

iii) Identification of market structure

Feature	Observation	Interpretation
Price falls as output rises	AR (price) declines from Rs 12 to Rs 5 when Q increases from 1 to 8	The firm is a price‑setter, not a price‑taker
MR is below AR and eventually negative	MR becomes zero at Q = 7 and negative at Q = 8	Characteristic of a monopoly (single seller facing a downward‑sloping demand)
No indication of many firms or identical products	Table gives a single set of revenue data	Monopoly is the appropriate market structure

Answer: The market structure is Monopoly.

Answer the following questions based on the given table. Unit of goods Price/AR (Rs.) TR (Rs.) MR (Rs.) : : : : 1 12 2 11 3 10 4 9 5 8 6 7 7 6 8 5 i) Complete the above table. [4] ii) Draw total,…

i) Completion of the table

ii) Revenue curves

iii) Identification of market structure

Discussion

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