Production and cost — Economics STD 11 Commerce — Question

A firm can sell more units of a good as it wants at a given price. Draw (a) TR curve (b) AR and MR curves of a firm. State the relationship between AR and MR curves in this case.
OR
Draw TR and MR curves of a firm which is free to sell any quantity of the good at a given price. Explain.

What change in total revenue will result in:

1. A Decrease in marginal revenue.
2. An increase in marginal revenue?

Explain the meaning of opportunity cost with the help of production possibility schedule.

Producer can sell more of a good only by lowering price. Prepare Total Revenue and Marginal Revenue schedule. Take four output levels.

From the following table, calculate average variable cost of each given level of output:

Output	Marginal Cost
1	80
2	70
3	72
4	78

The demand for a good rises by 20 per cent as a result of fall in its price. Its price elasticity of demand is (-)0.8. Calculate the percentage fall in price.

Calculate average variable cost and marginal cost from the following table:

Units of Output	Total Cost
0	75
1	95
2	110

Explain the conditions leading to maximisation of profits by a producer. Use total cost and total revenue approach.

Differentiate between substitute goods and complementary goods.

Draw supply curves with price elasticity of supply throughout equal to:

1. Zero.
2. One.
3. Infinity.
4. Less than one.