When 3 units are sold, the price per unit is lowered to Rs. In table 7, 2 units can be sold at a unit price of Rs. The position of various revenue curves is shown in Table 7: It becomes maximum and then begins to decline. Under imperfect competition conditions, total revenue increases at a diminishing rate. This is because the monopolist seller ordinarily has to accept a lower price for his product, as he increases his sales. In other words, the demand/AR curve has a negative slope and the MR curve lies below it. When a firm is working under conditions of monopoly or imperfect competition, its demand curve or AR curve is less than perfectly elastic, the exact degree of elasticity being different in different market situations depending upon the number of sellers and the nature of product. (iii) Revenue Curve under Imperfect Competition: When TR is constant MR curve will be represented by OX-axis as has been shown in figure 9. Area below each point of AR curve will be equal to each other. It implies that TR of the monopolist will remain same whatever may be the price. In this case AR curve is rectangular hyperbola. In this situation, a producer is so powerful that by selling his output at different prices, he can make the consumer spend his income on the concerned commodity. In case of pure monopoly, AR curve can be rectangular hyperbola as has been shown in Fig. This can be shown with the help of table 6. It indicates that to sell more units of a commodity, the monopolist will have to lower the price. Under monopoly both AR and MR curves slope downward. Monopoly is opposite to perfect competition. The firm only follows, (see figure below): A noteworthy point is that OP price is determined by demand and supply of industry. It is because additional units are sold at the same price as before. The Marginal Revenue curve coincides with the Average Revenue. In this case the average revenue curve is the horizontal line. At price OP, the seller can sell any amount of the commodity. In figure 8, on the X-axis, we take quantity whereas on Y-axis, we take revenue.
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