Dear student,

Answer all the questions.

Complete this assignment individually and submit individually in a word

document attachment.
1. A businessman sold 150 units of his output at the price of ₹ 15. Show the total revenue and
AR and demand curve in a properly labelled diagram.
2. In which type of market structure firm is a price taker?
3. In which type of market structure price will be same throughout the market?
4. In which type of market structure AR, MR and demand curves are horizontal? Show them in
a properly labelled diagram?
5. Show the firms equilibrium point in the short run in different market structures. Draw
suitable and properly labelled diagrams.
6. Demand for personal loans of a bank is found to be relatively inelastic. Show this situation in
a properly labelled diagram.
7. Show the demand curve or AR curve faced by a monopolist.
8. Demand curve faced by a monopolist is ----------------------- (elastic/ inelastic)
9. Give reasons for your answer to question number 8.
10. The following schedule shows the quantity of output of a firm (in tons) in the short run.
Calculate the AP and MP in the table given below and show the three stages of returns of the
firm in a properly labelled diagram.
Units of TP AP MP
labour
employed
10 40
20 120
30 240
40 280
50 280
60 250
70 200
11. A business has employed its resources as shown in the following schedule, and the
performance of the bank in terms of annual output at different stages is also given. Calculate
and illustrate whether the bank is enjoying economies of scale or experiencing diseconomies
of scale at different levels of output produced.

Size of the firm Annual output

Land Labour capital (in crores of ₹)
100 400 600 20000
200 800 1200 50000
300 1200 1800 80000
400 1600 2400 100000
500 2000 3000 120000
12. A newly established bank is started its business with a fixed cost of ₹1000 crores in the short run.
Calculate the other costs of the bank and complete the table with the given information below.
 13. The following is an imaginary demand schedule a business organisation.
No.of units of
output (products) FC VC TC MC AC
produced.

1 1200

2 1100

3 1050

4 1300

5 1400

6 1500

Demand schedule

Price of the Quantity

product demanded

30 1165 crores

20 1205 crores

10 1475 crores

i. Draw the demand curve for the product in a properly labelled diagram.
ii. Show the movement along the demand curve and also identify the situations of extension of
demand and contraction of demand in the above diagram which you have drawn for the
question – i.
14. A state government announced a tax reduction and subsidy on the production of a firm and
the firm increased its supply from 250 tons to 350 tones. Show this situation in a properly
labelled diagram.
15. A new business started with a fixed cost of ₹ 1400 crores in the short run. The firm’s average
variable cost for the production of 3 units is ₹ 550 crores and the marginal cost for the production of
unit one is ₹ 170 crores.

a) What is the total cost for the production of 3 units of output?

b) What is the average variable cost for the production of one unit?
c) What is the average fixed cost for the production of 2 units of output?
d) What is the total cost for the production of 1 unit of output?
e) Suppose the firm produced 8 units of output in the short run. Calculate the AFC for 8
units of output and show it in a diagram?