MCQs - Revenue Commerce Notes | EduRev

Crash Course of Micro Economics -Class 12

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Q.1 Let TR be total revenue , Q be quantity of output, and ‘n’ the number of units, then marginal revenue equals :
(a) TRn – TRn – 1 only
(b) Change in TR/Change in Q only
(c) Both (a) and (b)
(d) None
Ans: C

Q.2 Average revenue equals : 

(a) Total revenue divided by the quantity produced
(b) Price

(c) Both (a) and (b)
(d) None of the above
Ans: C

Q.3 If MR = 0,AR will be
(a) Rising
b) Falling
(c) Zero
(d) Constant

Ans: B

Q.4 Under___ form of market P = AR =  MR.

(a) Perfect competition
(b) Semi-perfect competition
(c) Monopsony
(d) Monopoly
Ans: D

Q.5 Value of Marginal Revenue at zero level of output is generally:

(a) One
(b) Zero
(c) Not defined
(d) None of the above
Ans: C

Q.6 When TR is rising MR will be

(a) Falling
(b) Rising

(c) Constant

(d) May rise or fall
Ans: D

Marginal revenue of a firm is addition to TR by selling 

(a) An additional unit of output
(b) Entire output

(c) First unit of output
(d) Both (b) and (c)

Ans: A

Q.8 If average revenue curve is a horizontal straight line, then marginal revenue curve will be:

(a) Downward sloping
(b) Horizontal straight line
(c) Upward Sloping
(d) Inversely S-shaped
Ans: A

When price falls with rise in output, then:

(a) MR curve is steeper than AR curve
(b) AR curve is steeper than MR curve

(c) MR and AR curves coincide in a horizontal straight line parallel to the X-axis

(d) None of these
Ans: A

(i) TR = SMR; and (ii) TC = SMC.

Tick the correct option

(a) Both (i) and (ii) are correct

(b) Only (ii) is correct        

(c) Only (i) is correct
(d) Both are incorrect

Ans: C

A balloon seller has decided that he will sell all his balloons at a fixed price of Rs. 10 each, in each a case. TR curve will be:

(a) Horizontal straight line parallel to the X-axis    

(b) Vertical straight line parallel to the Y-axis

(c) Positively sloped straight line passing from the origin

(d) Downward sloping straight line
Ans: C

When the rate of fall in MR is more than fall in AR:

(a) Price increases with increase in output

(b) Price decreases with increase in output

(c) Price remains constant

(d) None of these

Ans: B

When price falls with rise in output, then as quantity sold increases:

(a) MR falls quickly than AR

(b) MR falls slowly than AR

(c) Both MR and AR fall at the same rate

(d) MR and AR do not change

Ans: A

Q.14 Assume that when price is Rs.20, quantity demanded is 15 units, and when price is Rs.18, quantity demanded is 16 units. Based on this information, what is the marginal revenue resulting from an increase in output from 15 units to 16 units.

(a) Rs. (-) 18

(b) Rs. (-) 16

(c) Rs. (-) 12
(c) Rs. (-) 28
Ans: C

Q.15 The MR curve cuts the horizontal line between Y-axis and the demand curve into

(a) two unequal parts
(b) two equal parts

(c) Either (a) or (b)
(d) None of these
Ans: B

When 5 units of a goods are sold, Total Revenue is Rs. 100. When 6 units are sold, Marginal Revenue is Rs. 8. At what price are 6 units sold ? (Choose the correct alternative).

(a) Rs. 28 per unit

(b) Rs. 20 per unit

(c) Rs. 18 per unit

(d) Rs. 12 per unit
Ans: C

Average Revenue of a monopolist firm is (Choose the correct alternative)

(a) always more than the marginal revenue
(b) always less than the marginal revenue

(c) equal to marginal revenue
(d) None of the above.

Ans: A

AR curve of a firm is a straight line under perfect competition. It is 

(a) Theory of Factor Pricing

(b) Theory of Production

(c) Theory of Consumption
(d) Theory of Equilibrium
Ans: B

Q.19 Which of the following statements is appropriate in case of monopoly ?

(a) AR curve slopes upward while MR curve slopes downward

(b) Slope of both AR and MR curves is upwards

(c) Slope of both AR and MR curves is downwards and MR curve is below AR curve

(d) Slope of both AR and MR curves is downwards and MR curve is above AR curve

Ans: C

What is the shape of the average revenue curve under perfect competition ?

(a) Horizontal straight line

(b) Vertical straight line

(c) Rectangular hyperbola

(d) Downward
Ans: A

Price line is the same as :

(a) budget line

(b) firm’s demand curve

(c) firm’s AR curve
(d) both (b) and (c)

Ans: D

Under perfect competition, ‘Average Revenue’ and ‘Marginal Revenue’ are indicated by
(a) a common horizontal straight line
(b) a common vertical straight line

(c) a common rectangular hyperbola
(d) different lines sloping downward

Ans: A

When owing to a unit change in output, total revenue increases by Rs.100, them marginal revenue will be:

(a) greater than Rs. 100

(b) less than Rs. 100
(c) equal to Rs.100
(d) equal to zero

Ans: C

Area under AR curve is equal to:

(a) Total revenue

(b) Profit
(c) Marginal Revenue

(d) None of these

Ans: A

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