Class 12 Micro Economics - Chapter Non-competitive Markets NCERT Solutions | The market demand curve for a commodity
The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity are given in the schedules below.
|
Quantity |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
Price |
52 |
44 |
37 |
31 |
26 |
22 |
19 |
16 |
13 |
|
Quantity |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
|
Price |
10 |
60 |
90 |
100 |
102 |
105 |
109 |
115 |
125 |
Use the information given to calculate the following:
(a) The MIR and MC schedules
(b) The quantities for which MIR and MC are equal
(c) The equilibrium quantity of output and the equilibrium price of the commodity
(d) The total revenue, total cost and total profit in the equilibrium
(a)
|
Quantity |
Price/AR |
TR = P * Q |
MR = TRn- TRn-1 |
TC (Rs) |
MC = TCn-TCn-1 |
|
0 |
52 |
0 |
- |
10 |
- |
|
1 |
44 |
44 |
44 |
60 |
50 |
|
2 |
37 |
74 |
30 |
90 |
40 |
|
3 |
31 |
93 |
19 |
100 |
10 |
|
4 |
26 |
104 |
11 |
102 |
2 |
|
5 |
22 |
110 |
6 |
105 |
3 |
|
6 |
19 |
114 |
4 |
109 |
4 |
|
7 |
16 |
112 |
-2 |
115 |
6 |
|
8 |
13 |
104 |
-8 |
125 |
10 |
(b)MR equals MC at the 6th unit of output i.e., 4.
(c) At equilibrium, MR equals MC, and right here MR equals MC on the sixth unit of output, wherein MC is upward sloping. Hence, the equilibrium price is Rs 19.
(d) TR = Rs 114
TC =Rs 109
general earnings = TR - TC
= Rs 114 – 109 = Rs five
Hence, income is the same as Rs 5 .
More Questions From Class 12 Micro Economics - Chapter Non-competitive Markets
- Q:-
List the three different ways in which oligopoly firms may have.
- Q:-
Will the monopolist firm continue to produce in the short run if a loss is incurred at the best short run level of output?
- Q:-
Comment on the shape of MR curve in case when TR curve is a
(a) Positively sloped straight line
(b) Horizontal straight line
- Q:-
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- Q:-
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- Q:-
A monopoly firm has a total fixed cost of Rs 100 and has the following demand schedule:
Quantity
1
2
3
4
5
6
7
8
9
10
Marginal
Revenue
100
90
80
70
60
50
40
30
20
10
Find the short run equilibrium quantity, price and total profit. What would be the equilibrium in the long run? In case the total cost is Rs.1000, describe the equilibrium in the short run and in the long run.
- Q:-
Explain why the demand curve facing a firm under monopolistic competition is negatively sloped.
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
- Q:-
If the monopolist firm of Exercise 3 was a public sector firm. The government set a rule for its manager to accept the government fixed price as given (i.e. to be a price taker and therefore behave as a firm in a perfectly competitive market). And the government has decided to set the price so that demand and supply in the market are equal. What would be the equilibrium price, quantity and profit in this case?
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