Can Tr be a horizontal straight line?

When TR curve is a horizontal straight line, then MR is zero because the units sold is same at every level of output and Marginal Revenue is the additional revenue generated from the sale of an additional unit of output. Therefore, MR curve is also a horizontal straight line and coincides with the output-axis.

What would be the shape of demand curve so that TR curve is horizontal straight line?

1 Answer. (a) If the total revenue curve is a positively sloped straight line passing through the origin, then the slope of the demand curve will be a horizontal line parallel to the x-axis. This happens when prices are constant.

When TR of a firm is a straight line it indicates that Mr falls at a?

MR is the slope of TR. When TR rises as output rises, MR declines. When TR reaches maximum, MR becomes zero and, when TR declines, MR becomes negative.

Why is average revenue function horizontal?

The average revenue curve for a perfectly competitive firm is horizontal due to the fact that it faces perfectly elastic demand at the market determined price.

Which curve is horizontal line?

A Horizontal Line as it Relates to Supply and Demand Curves

When looking at supply and demand curves, a perfectly horizontal line indicates that an item has perfect elasticity, or that its demand is immediately responsive to changes in price.

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What is a straight line on a graph called?

The formal term to describe a straight line graph is linear, whether or not it goes through the origin, and the relationship between the two variables is called a linear relationship. Similarly, the relationship shown by a curved graph is called non-linear. y. 0. 0.

What is the shape of AR curve when TR curve is a horizontal line?

What is the shape of AR curve when <br> (i) TR curve is a positively sloped straight line passing through the origin <br> (ii) TR curve is a horizontal line ? Solution : (i) AR curve will be parallel to the X-axis <br> (ii) AR curve will slope downwards.

What is the shape of TR curve under perfect competition?

Each total revenue curve is a linear, upward-sloping curve. At any price, the greater the quantity a perfectly competitive firm sells, the greater its total revenue.

Why is Mr a straight line?

For a perfectly competitive firm with no market control, the marginal revenue curve is a horizontal line. Because a perfectly competitive firm is a price taker and faces a horizontal demand curve, its marginal revenue curve is also horizontal and coincides with its average revenue (and demand) curve.

What is the relation between TR and MR?

When price remains constant at all the levels of output, then Price = AR = MR. Therefore, price line is the same as MR curve. Also, TR = I MR. So, the area under MR curve or price line will be equal to TR.

When TR curve is a horizontal line MR curve is constant True or false?

When TR is a horizontal line then MR is not constant. Because MR is the additional revenue obtained from sale of every additional unit. And if TR is a horizontal line or constant, it means there is no increase in the TR. and when there is no increase in TR then it means MR is equal to zero.

When TR increases at a diminishing rate MR is a straight line True or False give reason?

When TR increases at a constant rate, MR should be constant. MR is the rate of the Total Revenue.

Which of the following shows difference between TR and TC of the firm Mcq?

Difference between TR and TC is maximum when MR=MC. Difference between total revenue and total cost indicates profits. A firm maximizes the profit when marginal revenue is equal to marginal cost.

What will be the shape of the demand curve?

Shape of the demand curve

The demand curve typically slopes downward due to the law of demand, which states that there is an inverse proportional relationship between price and demand of a commodity.

What is price line options the demand curve the AR curve the MR curve the TR curve?

Price line is the same as both firm's demand curve and firm's AR curve under the perfect competition. In perfectly competitive market any quantity can be demanded at the given price level.

How is Mr derived from TR?

The marginal revenue formula is calculated by dividing the change in total revenue by the change in quantity sold. To calculate the change in revenue, we simply subtract the revenue figure before the last unit was sold from the total revenue after the last unit was sold.

When the marginal revenue curve intersects the horizontal axis?

The marginal revenue curve thus crosses the horizontal axis at the quantity at which the total revenue is maximum. When the demand curve is a straight line, this occurs at the middle point of the curve, at a point on the horizontal axis that bisects the distance 0 Q_m.

What is the shape of marginal revenue curve?

The marginal revenue curve is downward sloping and below the demand curve and the additional gain from increasing the quantity sold is lower than the chosen market price.

Why average revenue curve is a horizontal line under perfect competition?

Under perfect competition the demand curve of firm is a horizontal straight line parallel to X-axis. It implies the firm will sell the product at the prevailing price which is determined by the industry. The individual firm cannot influence the price.

Why is demand curve horizontal in perfect competition?

A perfectly competitive firm's demand curve is a horizontal line at the market price. This result means that the price it receives is the same for every unit sold. The marginal revenue received by the firm is the change in total revenue from selling one more unit, which is the constant market price.

What is the shape of TR curve in a monopoly or monopolistic competition?

Since a monopolist is the single supplier of a particular product, he has to reduce the price to increase sales. This leads to a downward sloping demand curve.

What is the shape of AR curve when I Tr curve is positively sloped straight line passing through the origin II Tr curve is a horizontal line?

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.

What are the shapes of AR and MR curve when each unit is sold at the same price?

1 Answer. AR and MR curves coincide in a horizontal straight line parallel to X-axis.

What will be the shape of MR curve when TR increases at constant rate explain with the help of diagram?

1 Answer. MR curve will be horizontal straight line parallel to X-axis and will coincide with AR curve.