25. Illustrate TR, AR and MR curves under perfect competition and imperfect competition. Quantity TFC TVC 0 100 0 1 100 25 2 100 40 3 100 50 4 100 70 5 100 100 6 100 145 7 100 205 8 100 285 9 100 385 10 100 515

Answer:

TR, AR and MR Curves under Perfect Competition and Imperfect Competition

TR, AR and MR curves are graphical representations that illustrate the relationship between total revenue (TR), average revenue (AR) and marginal revenue (MR) for firms under perfect competition and imperfect competition. Perfect competition is a market structure in which there are many firms selling an identical product, there is no barrier to entry or exit, and the firms are price-takers. Imperfect competition is a market structure in which there are few firms selling a differentiated product, there is a barrier to entry or exit, and the firms are price-makers.

TR Curve under Perfect Competition

Under perfect competition, the TR curve is a straight line that is equal to the market price multiplied by the quantity sold. This is because the firms are price-takers and must accept the market price. As the quantity sold increases, the TR increases by the same amount as the market price.

AR Curve under Perfect Competition

Under perfect competition, the AR curve is also a straight line that is equal to the market price. This is because the firms are price-takers and must accept the market price. As the quantity sold increases, the AR remains constant since it is equal to the market price.

MR Curve under Perfect Competition

Under perfect competition, the MR curve is a horizontal line at the level of the market price. This is because the firms are price-takers and the MR is equal to the market price. As the quantity sold increases, the MR remains constant since it is equal to the market price.

TR Curve under Imperfect Competition

Under imperfect competition, the TR curve is not a straight line since the firms are price-makers. As the quantity sold increases, the TR increases but at a decreasing rate since the firms can set their own price.

AR Curve under Imperfect Competition

Under imperfect competition, the AR curve is not a straight line since the firms are price-makers. As the quantity sold increases, the AR decreases since the firms can set their own price.

MR Curve under Imperfect Competition

Under imperfect competition, the MR curve is not a horizontal line since the firms are price-makers. As the quantity sold increases, the MR decreases since the firms can set their own price.