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Why is the total revenue curve of a price taking firm an upward sloping straight line ? Why does the curve pass through the origin ? |
Answer» <html><body><p></p>Solution :TR <a href="https://interviewquestions.tuteehub.com/tag/curves-941810" style="font-weight:bold;" target="_blank" title="Click to know more about CURVES">CURVES</a> passes through the <a href="https://interviewquestions.tuteehub.com/tag/origin-1139399" style="font-weight:bold;" target="_blank" title="Click to know more about ORIGIN">ORIGIN</a>,because when output sold is <a href="https://interviewquestions.tuteehub.com/tag/zero-751093" style="font-weight:bold;" target="_blank" title="Click to know more about ZERO">ZERO</a> , the TR of the firm is also zero. TR rises as the firm increases the quantity sold by it. Thus TR is an upward sloping curve under perfect competition. It is a straight line as <a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a> is constant.</body></html> | |