A perfectly competitive firm's total revenue (TR) curve will slope and to the .
Question
A perfectly competitive firm's total revenue (TR) curve will slope upward and to the right.
Solution
A perfectly competitive firm's total revenue (TR) curve will slope upwards and to the right.
Here's why:
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Total Revenue (TR) is calculated as the price of the good multiplied by the quantity of the good sold (TR = P*Q).
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In a perfectly competitive market, the firm is a price taker, meaning it accepts the market price as given. The price remains constant regardless of the quantity sold.
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Therefore, as the firm sells more quantity (moves along the x-axis to the right), the total revenue increases (moves along the y-axis upwards).
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Hence, the TR curve for a perfectly competitive firm slopes upwards and to the right.
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