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Revenue Curve under Monopoly | NEB Class 12 Economics | BBS 1st year Economics (Explained in Nepali)

Автор: Learn with Sadhana

Загружено: 2025-10-27

Просмотров: 551

Описание: In this video, we explore the Revenue Curve under a Monopoly Market, a fundamental topic in Class 12 Economics. Monopoly is a market structure where a single seller dominates the market with no close substitutes for the product, giving the firm significant control over price. Understanding the revenue curves under monopoly is crucial to grasp how monopolists determine output, price, and profit-maximizing strategies.
We start with Total Revenue (TR), which is the total income a monopolist earns from selling a certain quantity of goods. TR initially increases as the quantity sold rises but eventually may decline if prices fall too much due to the law of demand. This behavior highlights that monopolists face a downward-sloping demand curve, unlike perfectly competitive firms.

Next, we discuss Average Revenue (AR), which is the revenue per unit sold. In a monopoly, AR is equal to the price at each output level. The AR curve is identical to the demand curve and slopes downward from left to right, indicating that to sell additional units, the monopolist must lower the price. The slope of the AR curve is essential in understanding the relationship between price and quantity in monopoly markets.

We then focus on Marginal Revenue (MR), which is the additional revenue gained by selling one more unit of output. The MR curve lies below the AR curve because the monopolist must reduce the price of all units sold to sell an extra unit, causing MR to decrease faster than AR. MR can become zero or even negative if additional output reduces total revenue, helping the monopolist identify the profit-maximizing quantity.
This video includes clear sketches of TR, AR, and MR curves, showing how each curve behaves in a monopoly. We also discuss real-life examples, such as local utility companies or certain pharmaceutical markets, where monopoly pricing and revenue concepts are applied.

Remember, the key points are:
TR curve rises, peaks, and then falls.
AR curve is the downward-sloping demand curve.

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