Business Economics · Class 12 Commerce
Ch 5Revenue, Supply and Pricing — Class 12 Business Economics, concept-first.
Every business, whether a small trading firm in Cuttack or a large manufacturing company, must understand the money it earns from selling its output before it can judge whether a decision to expand, contract, or change its price is worthwhile.
Key concepts
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Revenue Concepts (TR, AR, MR)
Total Revenue is the firm's total sale proceeds, . Average Revenue is revenue per unit, , which always simplifies to — so a firm's AR curve is identical to its demand curve viewed from the selling side.
Most relevant Q&A
- Define total revenue, average revenue and marginal revenue, and explain the relationship among them.Free
- A firm under imperfect competition faces the following demand schedule. Fill in Total Revenue (TR), Average Revenue (AR) and Marginal Revenu…Free
- Distinguish between (limit your answer to 50 words) : Average revenue and Marginal revenue.Preview
In previous exams
How often this chapter’s concepts have been examined — real appearance data, never estimated.
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Revenue Concepts: Total, Average and Marginal Revenue
Every business, whether a small trading firm in Cuttack or a large manufacturing company, must understand the money it earns from selling its output before it can judge whether a decision to expand, c…
Relationship between AR and MR under Different Markets
How average revenue and marginal revenue behave depends entirely on the market structure in which the firm sells — the link back to the Market Structures chapter.
Supply and the Law of Supply
Revenue explains what a firm earns; supply explains how much it is willing to offer for sale. Supply is not the same as stock: supply is the quantity of a good that a seller is willing and able to off…
Elasticity of Supply
The law of supply tells us the direction in which quantity supplied changes; elasticity of supply measures the degree — how responsive quantity supplied is to a change in price.
Pricing Methods and Policies in Business
In theory a purely competitive firm simply accepts the market price. In real business, however, a firm must actively decide the price of its product, balancing its costs, its competitors, and what buy…
Exercises
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- Q8Define total revenue, average revenue and marginal revenue, and explain the relationship among them.Free
- Q9State the Law of Supply. Distinguish between a movement along a supply curve and a shift of the supply curve.Free
- Q10Explain price skimming and penetration pricing. In what circumstances would a firm choose each for a newly launched product?Preview
- Q11State the five degrees of elasticity of supply with the value of $E_s$ for each, and give one determinant that makes supply more elastic.Preview
Sample & Board Papers
Sample papers and previous-year board questions for this subject.
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- Q1Examine the correctness of the following statement. Correct it if necessary, without changing the portion underlined : Supply curve shows th…Preview
- Q2Distinguish between (limit your answer to 50 words) : Average revenue and Marginal revenue.Preview
- Q3Under perfect competition average revenue is equal to : (a) Marginal revenue (b) Marginal cost (c) Average cost (d) None of thesePreview
More questions
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- Example 1A firm under imperfect competition faces the following demand schedule. Fill in Total Revenue (TR), Average Revenue (AR) and Marginal Revenu…Free
- Example 2A wheat farmer sells in a perfectly competitive market where the price is fixed at ₹5 per kg. Prepare the TR, AR and MR schedule for sales o…Free
- Example 3A monopolist faces the linear demand curve $P = 20 - 2Q$ (P in ₹, Q in units). Derive the TR, AR and MR functions, and find their values at…Free
- Example 4When the price of a good rises from ₹10 to ₹12 per unit, the quantity supplied rises from 100 units to 130 units. Calculate the price elasti…Preview
- Example 5The price of a commodity falls from ₹20 to ₹18 and the quantity supplied falls from 200 units to 170 units. Using the arc (average) method,…Preview
- Example 6A straight-line supply curve passes through the origin. When price doubles from ₹10 to ₹20, quantity supplied doubles from 50 units to 100 u…Preview
- Example 7A manufacturer's cost of producing one unit of a product is ₹80. The firm follows a cost-plus pricing policy with a mark-up of 25% on cost.…Preview