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Questions and Answers
At OQ level of output, MR = 0, TR is maximum (at point ____)
At OQ level of output, MR = 0, TR is maximum (at point ____)
H
At point P, corresponding to OQ level of output, e = ___ (P is midpoint)
At point P, corresponding to OQ level of output, e = ___ (P is midpoint)
1
If the quantity is greater than OQ, it will correspond to that portion of the AR curve where e < __
If the quantity is greater than OQ, it will correspond to that portion of the AR curve where e < __
1
Beyond OQ level of output MR < 0 (-ve), TR ______
Beyond OQ level of output MR < 0 (-ve), TR ______
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For a quantity less than OQ, e > __ and MR is +ve
For a quantity less than OQ, e > __ and MR is +ve
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Where elasticity is less than unity, MR is ______
Where elasticity is less than unity, MR is ______
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Study Notes
Elasticity and Revenue
- At the OQ level of output, Marginal Revenue (MR) is 0, and Total Revenue (TR) is maximum at this point.
- At point P, corresponding to the OQ level of output, elasticity (e) is 1, which makes P the midpoint.
- If the quantity is greater than OQ, it corresponds to the portion of the Average Revenue (AR) curve where elasticity (e) is less than 1.
- Beyond the OQ level of output, MR is less than 0 (negative), and TR decreases.
- For a quantity less than OQ, elasticity (e) is greater than 1, and MR is positive.
- Where elasticity is less than unity, MR is greater than the price.
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Description
Explore concepts of cost and revenue in microeconomics through analysis of output levels, marginal revenue, total revenue, and elasticity under imperfect competition.
