1.

What would be shape of demand curve, so that TR curve is : (a) a positively sloped straight line passing through the origin, (b) a horizontal line ?

Answer»

Solution :(a)Demand CUVE or AR cuve will be a horizontal straight line parallel to the X - axis because POSITIVELY SLOPED straight line TR curve PASSING throught the origin indicates that price (or AR) remains constant at all levels of OUTPUT.
(b) Demand curve or AR curve will slope downwards from left to right because horizontal TR indicates that TR remains same at levels of output. It is possible only when price (or AR) falls with rise in output.


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