A competitive firm sells 5 units at the market price of Rs 12 per unit. Its total cost is Rs 45. Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Total revenue | (I) | Rs 12 |
| (B) | Profit | (II) | Rs 60 |
| (C) | Average revenue | (III) | Rs 9 |
| (D) | Average cost | (IV) | Rs 15 |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A) - (II), (B) - (IV), (C) - (I), (D) - (III)
For a competitive firm, TR = p × q, AR = TR ÷ q = p, profit = TR − TC, and average cost = TC ÷ q.
| List-I | List-II | Reason |
|---|---|---|
| (A) Total revenue | (II) Rs 60 | TR = price × output = 12 × 5 = Rs 60 |
| (B) Profit | (IV) Rs 15 | Profit = TR − TC = 60 − 45 = Rs 15 |
| (C) Average revenue | (I) Rs 12 | AR = TR ÷ q = 60 ÷ 5 = Rs 12. It equals the market price. |
| (D) Average cost | (III) Rs 9 | AC = TC ÷ q = 45 ÷ 5 = Rs 9 |
NCERT (2026-27): “4.2 Revenue … A firm earns revenue by selling the good that it produces in the market. Let the market price of a unit of the good be p. Let q be the quantity of the good produced, and therefore sold, by the firm at price p. Then, total revenue (TR) of the firm is defined as the market price of the good (p) multiplied by the firm’s output (q).” “4.2 Revenue … The average revenue ( AR ) of a firm is defined as total revenue per unit of output. … In other words, for a price-taking firm, average revenue equals the market price.” “4.3 Profit Maximisation A firm produces and sells a certain amount of a good. The firm’s profit, denoted by π, is defined to be the difference between its total revenue (TR) and its total cost of production (TC ).” |