A firm sells its good in a perfectly competitive market at Rs 10 per unit. Match List-I with List-II:
| List-I | List-II | ||
|---|---|---|---|
| (A) | Total revenue from 4 units | (I) | Rs 10 |
| (B) | Total revenue from 6 units | (II) | Rs 40 |
| (C) | Change in total revenue when sales rise from 4 to 6 units | (III) | Rs 20 |
| (D) | Marginal revenue of the 6th unit | (IV) | Rs 60 |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) - (II), (B) - (IV), (C) - (III), (D) - (I)
At a fixed price of Rs 10, TR = p × q, and each extra unit adds Rs 10, so MR = price.
| List-I | List-II | Reason |
|---|---|---|
| (A) Total revenue from 4 units | (II) Rs 40 | 10 × 4 = 40. |
| (B) Total revenue from 6 units | (IV) Rs 60 | 10 × 6 = 60. |
| (C) Change in total revenue when sales rise from 4 to 6 units | (III) Rs 20 | 60 − 40 = 20. |
| (D) Marginal revenue of the 6th unit | (I) Rs 10 | TR from 6 units minus TR from 5 units: 60 − 50 = 10, the price. |
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 marginal revenue (MR) of a firm is defined as the increase in total revenue for a unit increase in the firm’s output. … Thus, for the perfectly competitive firm, MR=AR=p In other words, for a price-taking firm, marginal revenue equals the market price. Setting the algebra aside, the intuition for this result is quite simple. When a firm increases its output by one unit, this extra unit is sold at the market price. Hence, the firm’s increase in total revenue from the one-unit output expansion – that is, MR – is precisely the market price.” |