# 100 MCQS of Revenue chapter Microeconomics class 11

Looking for important MCQs of Revenue chapter with answers and explanation of Microeconomics class 11 CBSE, ISC and other state Board.

## Multiple Choice Questions of Revenue chapter with answers of Microeconomics class 11

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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 – b)

AR curve is downward sloping:

a) When price falls with rise in output
b) When price initially rises at an increasing rate, then at a diminishing rate
c) When price remains same at all levels of output
d) In case of imperfect Competition

Ans – a), d)

When MR remains same, TR increases at a :

a) Constant rate
b) Decreasing rate
c) Increasing rate
d) None of these

Ans – a)

When price remains same with rise in output, AR curve:

a) Is vertical straight line parallel to Y-axis
b) Is horizontal straight line parallel to X-axis
c) Is downward sloping
d) Coincide with MR curve

Ans – b), d)

When price falls with rise in output, TR is __ when MR is zero.

a) Maximum
b) Minimum
c) Zero
d) None of these

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) MR curve lies below AR curve

Ans – a), d)

A balloon seller has decided that he will sell all his balloons at a fixed price of ₹100 each.
In such 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)

What happens to TR when MR is positive?

a) TR increases
b) TR decreases
c) TR is Maximum
d) TR remains same

Ans – a)

When total revenue is constant, what will be the effect on average revenue?

a) AR will fall
b) AR wil increase
c) AR will also be constant
d) No effect on AR

Ans – a)

If TR curve is a horizontal straight line parallel to the X-axis, then MR curve will:

a) Coincide with X-axis
b) Slope downwards
c) Slope upwards
d) horizontal straight line parallel to the X-axis

Ans – a)

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 remaings constant with increase in output
d) None of these

Ans – b)

If a firm’s total revenue curve takes the form of a straight line which passes through the origin,
then:

a) Price>Marginal Revenue
b) Price=Marginal Revenue
c) Price<Marginal Revenue
d) None of these

Ans – b)

At any given level of a firm’s output, marginal revenue is the revenue earned by selling:

a) Entire output
c) Both a) and b)
d) Neither a) nor b)

Ans – b)

Marginal revenue refers to:

a) Addition to total revenue when one more unit of output is produced
b) Addition to total revenue when one more unit of output is sold
c) Addition to total revenue when one more unit of variable factor is employed
d) Change in total revenue with sale of one more unit

Ans – b), d)

At a price of ₹20, 15 units are sold and at price of ₹19, 16 units are sold. Based on this
information, what is the marginal revenue resulting from an increase in output from 15 units
to 16 units?

a) ₹6
b) ₹4
c) ₹5
d) ₹300

Ans – b)

If TR = Total Revenue and Q = Quantity sold, then TR ÷ Q refers to:

a) Zero Revenue
b) Average Revenue
c) Marginal Revenue
d) None of these

Ans – b)

If total revenue is ₹1,00,000 when 20,000 units are sold, then average revenue is equal to:

a) ₹1,00,000
b) ₹20,000
c) ₹5
d) ₹1,20,000

Ans – c)

If a seller gets ₹10,000 by selling 100 units and ₹14,000 by selling 120 units, his Marginal Revenue
is:

a) ₹4,000
b) ₹450
c) ₹200
d) ₹100

Ans – c)

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) Both MR and AR slope downwards

Ans – a), d)

When 5 units of a good is sold, total revenue is ₹100. When 6 units are sold, marginal revenue
is ₹8. At what price are 6 units sold?

a) ₹28 per unit
b) ₹20 per unit
c) ₹18 per unit
d) ₹12 per unit

Ans – c)

Suppose total revenue is rising at a constant rate as more and more units of a commodity are sold,
marginal revenue would be:

a) Greater than Average Revenue
b) Equal to Average Revenue
c) Less than Average Revenue
d) Rising

Ans – b)

A firm is able to sell any quantity of a good at a given price. The firm’s marginal revenue will
be:

a) Greater than Average Revenue
b) Less than Average Revenue
c) Equal to Average Revenue
d) Zero

Ans – c)

A firm is able to sell more quantity of a good only by lowering the price. The firm’s marginal
revenue, as he goes on selling, would be:

a) Greater than Average Revenue
b) Less than Average Revenue
c) Equal to Average Revenue
d) Zero

Ans – b)

Average Revenue equals:

a) Total revenue divided by the quantitiy produced
b) Price
c) Both a) and b)
d) None of these

Ans – c)

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 of the above

Ans – c)

The total revenue earned by selling 20 units is ₹700. Marginal revenue earned by selling 21st
unit is ₹70. The value of Total Revenue earned by selling total 21 units will be __ .

a) ₹721
b) ₹630
c) ₹770
d) ₹720

Ans – a)

If the Marginal Revenue curve is parallel to the X-axis, the price of the commodity would be
__ .

a) Equal to Marginal Revenue
b) More than Marginal Revenue
c) Zero
d) Less than Marginal Revenue

Ans – a)

Which of the following is a true statement?

a) AR indicates Price
b) AR curve and Demand Curve are the same
c) TR is maximum when MR = 0
d) All of the above

Ans – d)

The product of ‘quantity’ and ‘AR’ at every unit sold is the firm’s:

a) TR
b) TVC
c) MR
d) None of these

Ans – a)