The Theory of the Firm under Perfect CompetitionClass 12 Introductory Microeconomics Assertion & Reason Questions

Assertion (A): In a perfectly competitive market, an individual firm is a price-taker.

Reason (R): The market consists of a large number of buyers and sellers, and each firm sells a homogenous product, making no single firm large enough to influence the market price.

Assertion (A): The total revenue (TR) curve of a firm under perfect competition is an upward-sloping straight line starting from the origin.

Reason (R): For a price-taking firm, marginal revenue (MR) is constant and equal to the market price (p).

Assertion (A): For a price-taking firm, average revenue (AR) is equal to the market price (p).

Reason (R): Total Revenue (TR) is defined as the market price of the good (p) multiplied by the firm's output (q).