Class 12 Micro Economics - Chapter The Theory of the Firm under Perfect Competition NCERT Solutions | At the market price of Rs 10, a firm sup

The market price of a good changes from Rs 5 to Rs 20. As a result, the quantity supplied by a firm increases by 15 units. The price elasticity of the firm’s supply curve is 0.5. Find the initial and final output levels of the firm.

A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increases to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm’s supply curve?

How does the imposition of a unit tax affect the supply curve of a firm?

What is the supply curve of a firm in the long run?

What is the relation between market price and average revenue of a price-taking firm?

What is the relation between market price and marginal revenue of a price-taking firm?

How does an increase in the number of firms in a market affect the market supply curve?

Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is Rs 10.

How does an increase in the price of an input affect the supply curve of a firm?

Will a profit-maximising firm in a competitive market ever produce a positive level of output in the range where the marginal cost is falling? Give an explanation.

Explain the concept of a production function

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?

Explain market equilibrium.

Discuss the central problems of an economy.

What do you mean by the budget set of a consumer?

What is the total product of input?

From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:

When do we say that there is an excess demand for a commodity in the market?

What do you mean by the production possibilities of an economy?

What is budget line?

Explain price elasticity of demand.

Consider a market where there are just two consumers and suppose their demands for the good are given as follows:

Calculate the market demand for the good.

Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose the price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.

Can you think of any commodity on which the price ceiling is imposed in India? What may be the consequence of price-ceiling?

At which point does the SMC curve intersect the SAC curve? Give a reason in support of your answer. 

Will the monopolist firm continue to produce in the short run if a loss is incurred at the best short run level of output?

What do you mean by the production possibilities of an economy?

The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity are given in the schedules below. 

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

What are the total fixed cost, total variable cost and total cost of a firm? How are they related?

Let the production function of a firm be Q=2 L2 K2Q=2 L2 K2

Find out the maximum possible output that the firm can produce with 5 units of LL and 2 units of KK. What is the maximum possible output that the firm can produce with zero units of LL and 10 units of KK?