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Chapters
2: Theory Of Consumer Behaviour
3: Production And Costs
▶ 4: The Theory Of The Firm Under Perfect Competition
5: Market Equilibrium
6: Non-Competitive Markets
![NCERT solutions for Economics - Introductory Microeconomics [English] chapter 4 - The Theory Of The Firm Under Perfect Competition - Shaalaa.com](/images/9788174506788-economics-introductory-microeconomics-english_6:792ddeb7006e40d6b89eea4d02d1d6cf.jpg "NCERT solutions for Economics - Introductory Microeconomics [English] chapter 4 - The Theory Of The Firm Under Perfect Competition")
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Solutions for Chapter 4: The Theory Of The Firm Under Perfect Competition
Below listed, you can find solutions for Chapter 4 of CBSE NCERT for Economics - Introductory Microeconomics [English].
NCERT solutions for Economics - Introductory Microeconomics [English] 4 The Theory Of The Firm Under Perfect Competition Exercise [Pages 67 - 70]
What are the characteristics of a perfectly competitive market?
How are the total revenue of a firm, market price, and the quantity sold by that firm related to each other?
What is the price line?
Why is the total revenue curve of a price-taking firm an upward-sloping straight line? Why does the curve pass through the origin?
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?
What conditions must hold if a profit-maximizing firm produces positive output in a competitive market?
Can there be a positive level of output that a profit-maximising firm produces in a competitive market at which market price is not equal to marginal cost? Give an explanation.
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.
Will a profit-maximising firm in a competitive market produce a positive level of output in the short run if the market price is less than the minimum of AVC?
Will a profit-maximising firm in a competitive market produce a positive level of output in the long run if the market price is less than the minimum of AC? Give an explanation.
What is the supply curve of a firm in the short run?
What is the supply curve of a firm in the long run?
How does technological progress affect the supply curve of a firm?
How does the imposition of a unit tax affect the supply curve of a firm?
How does an increase in the price of an input affect the supply curve of a firm?
How does an increase in the number of firms in a market affect the market supply curve?
What does the price elasticity of supply mean? How do we measure it?
Calculate the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is Rs 10.
|
Quantity Sold |
TR |
MR |
AR |
|
0 |
|||
|
1 |
|||
|
2 |
|||
|
3 |
|||
|
4 |
|||
|
5 |
|||
|
6 |
The following table shows the total revenue and total cost schedules of a competitive firm. Calculate the profit at each output level. Determine also the market price of the good.
|
Quantity Sold |
TR (Rs.) |
TC (Rs.) |
Profit |
|
0 |
0 |
5 |
|
|
1 |
5 |
7 |
|
|
2 |
10 |
10 |
|
|
3 |
15 |
12 |
|
|
4 |
20 |
15 |
|
|
5 |
25 |
23 |
|
|
6 |
30 |
33 |
|
|
7 |
35 |
40 |
The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising the level of output.
|
Quantity Sold |
TC (Rs.) |
|
0 |
5 |
|
1 |
15 |
|
2 |
22 |
|
3 |
27 |
|
4 |
31 |
|
5 |
38 |
|
6 |
49 |
|
7 |
63 |
|
8 |
81 |
|
9 |
101 |
|
10 |
123 |
Consider a market with two firms. The following table shows supply schedules of two firms: SS1 denotes the supply schedule of firm 1 and SS2 denotes the supply schedule of firm 2. Calculate the market supply schedule.
|
Price (Rs ) |
SS1 (units) |
SS2 (units) |
|
0 |
0 |
0 |
|
1 |
0 |
0 |
|
2 |
0 |
0 |
|
3 |
1 |
1 |
|
4 |
2 |
2 |
|
5 |
3 |
3 |
|
6 |
4 |
4 |
Consider a market with two firms. In the following table, columns labelled as SS1 and SS2 give the supply schedules of firm 1 and firm 2 respectively. Compute the market supply schedule.
|
Price (Rs ) |
SS1 (kg) |
SS2 (kg) |
|
0 |
0 |
0 |
|
1 |
0 |
0 |
|
2 |
0 |
0 |
|
3 |
1 |
0 |
|
4 |
2 |
0.5 |
|
5 |
3 |
1 |
|
6 |
4 |
1.5 |
|
7 |
5 |
2 |
|
8 |
6 |
2.5 |
There are three identical firms in a market. The following table shows the supply schedule of firm 1. Calculate the market supply schedule.
|
Price (Rs ) |
SS1 (units) |
|
0 |
0 |
|
1 |
0 |
|
2 |
2 |
|
3 |
4 |
|
4 |
6 |
|
5 |
8 |
|
6 |
10 |
|
7 |
12 |
|
8 |
14 |
A firm earns a revenue of Rs 50 when the market price of a good is Rs 10. The market price increase to Rs 15 and the firm now earns a revenue of Rs 150. What is the price elasticity of the firm’s supply curve?
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.
At the market price of Rs 10, a firm supplies 4 units of output. The market price increases to Rs 30. The price elasticity of the firm’s supply is 1.25. What quantity will the firm supply at the new price?
Solutions for 4: The Theory Of The Firm Under Perfect Competition
NCERT solutions for Economics - Introductory Microeconomics [English] chapter 4 - The Theory Of The Firm Under Perfect Competition
Shaalaa.com has the CBSE Mathematics Economics - Introductory Microeconomics [English] CBSE solutions in a manner that help students grasp basic concepts better and faster. The detailed, step-by-step solutions will help you understand the concepts better and clarify any confusion. NCERT solutions for Mathematics Economics - Introductory Microeconomics [English] CBSE 4 (The Theory Of The Firm Under Perfect Competition) include all questions with answers and detailed explanations. This will clear students' doubts about questions and improve their application skills while preparing for board exams.
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Concepts covered in Economics - Introductory Microeconomics [English] chapter 4 The Theory Of The Firm Under Perfect Competition are Revenue, Profit Maximisation, Determinants of a Firm’s Supply Curve, Market Supply Curve, Price Elasticity of Supply, Market, Market Equilibrium, Determination of Market Equilibrium, Effects of Shifts in Demand and Supply, Features of Perfect Competition, Imperfect Competition, Forms of Market, Features of Oligopoly, Market Forms - Perfect Oligopoly, Market Forms - Imperfect Oligopoly, Equilibrium Price, Simple Applications of Demand and Supply, Price Ceiling, Price Floor, Market, Market Equilibrium, Determination of Market Equilibrium, Effects of Shifts in Demand and Supply, Features of Perfect Competition, Imperfect Competition, Forms of Market, Features of Oligopoly, Market Forms - Perfect Oligopoly, Market Forms - Imperfect Oligopoly, Equilibrium Price, Simple Applications of Demand and Supply, Price Ceiling, Price Floor, Revenue, Profit Maximisation, Determinants of a Firm’s Supply Curve, Market Supply Curve, Price Elasticity of Supply.
Using NCERT Economics - Introductory Microeconomics [English] solutions The Theory Of The Firm Under Perfect Competition exercise by students is an easy way to prepare for the exams, as they involve solutions arranged chapter-wise and also page-wise. The questions involved in NCERT Solutions are essential questions that can be asked in the final exam. Maximum CBSE Economics - Introductory Microeconomics [English] students prefer NCERT Textbook Solutions to score more in exams.
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