Show that AR curve and demand curve are the same. - Vidyadip

Question

Show that AR curve and demand curve are the same.

✓

Answer

A buyer's demand curve graphically represents the quantities demanded by a buyer at various prices. In other words, it shows the various levels of average revenue at which different quantities of the goods are sold by the seller. Therefore, in economics, it is customary to refer AR curve as the Demand Curve of a firm.$\text{Average Revenue}=\frac{\text{Total Revenue}}{\text{Quantity}}$
$\frac{\text{Price}\times\text{Quantity}}{\text{Quantity}}=\text{Price}$
$\text{AR}=\text{P}(\text{price})$

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "4 Marks Question" from The theory of the firm under perfect competition→The theory of the firm under perfect competition — all question types→Economics STD 11 Commerce question papers→CBSE Board STD 11 Commerce question papers→CBSE Board question paper generator→

Similar questions

At a price of $40$ per unit, the quantity supplied of a commodity is $400$ units. When its price falls by $10$ percent, its quantity supplied falls by $36$ units. Calculate its elasticity of supply. Is its supply elastic?

What is the relationship between total variable cost and marginal cost? Explain.

Explain the relation between marginal revenue and average revenue when a firm is able to sell more quantity of output:

At the same price.
Only by lowering the price.

A consumer spends ₹ 250 on a good when its price is ₹ 5 per unit. When the price rises to ₹ 6 per unit, he spends ₹ 240. Calculate the price elasticity by percentage method.

Given that the total fixed cost is = 60, complete the following table:

Output (Units)	AVC	TC	MC
1	20	-	-
2	15	-	-
3	20	-	-

When price of a commodity falls by ₹ $1$ per unit, its quantity demanded rises by $3$ units. Its price elasticity of demand is $(-)2$. Calculate its quantity demanded if the price before the change was ₹ $10$ per unit.

The demand for a good at ₹ $10$ per unit is $40$ units. Price falls by ₹ $5$. If price elasticity of demand is $(-) 3$, calculate the new quantity demanded.

Complete the following table:

Output(units)	Total Variable Cost	Average Variable Cost	Marginal Cost
1	10	-	-
-	-	8	6
3	27	-	-
-	-	10	13

Distinguish between decrease in demand and decrease in quantity demanded.

Price of commodity A is $10$ per unit and Total Revenue at this price is ₹ $1600.$ When its price rises by $20\%$, Total Revenue increases by ₹ $800$. Calculate its Price Elasticity of Supply.