Business Economics: Cost and Revenue Analysis
6 Questions
0 Views

Business Economics: Cost and Revenue Analysis

Created by
@BoundlessSaxhorn

Podcast Beta

Play an AI-generated podcast conversation about this lesson

Questions and Answers

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)

1

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 ______

<p>declines</p> Signup and view all the answers

For a quantity less than OQ, e > __ and MR is +ve

<p>1</p> Signup and view all the answers

Where elasticity is less than unity, MR is ______

<p>negative</p> Signup and view all the answers

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.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

Description

Explore concepts of cost and revenue in microeconomics through analysis of output levels, marginal revenue, total revenue, and elasticity under imperfect competition.

More Like This

Business Economics
5 questions
Business Economics: Definition and Scope
40 questions
The Firm MCQ 2 (Costs and large firms)
10 questions
Use Quizgecko on...
Browser
Browser