Concept of Revenue MCQ — Class 11

Test your understanding of Concept of Revenue with 20 free questions across Easy and Moderate. Hard and Extreme require Premium. Choose a level in the interactive quiz to answer questions and review explanations.

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Key concepts to revise

Total revenue

Total revenue: the total receipts from sale of output, equal to price multiplied by quantity sold

Average revenue

Average revenue: total revenue per unit sold and therefore equal to price

Marginal revenue

Marginal revenue: the change in total revenue from selling one additional unit

AR as firm demand curve

AR as firm demand curve: the average revenue curve shows the price the firm can obtain at different quantities and therefore represents its demand curve

AR = MR under constant price

AR = MR under constant price: when the firm can sell every unit at the same price, both average and marginal revenue equal that price

Downward-sloping AR

Downward-sloping AR: when price must be lowered to sell more output, average revenue falls as output rises

MR below AR

MR below AR: when AR falls with output, marginal revenue lies below average revenue because lowering price affects additional revenue

TR rises when MR is positive

TR rises when MR is positive: positive marginal revenue adds to total revenue

TR maximum when MR is zero

TR maximum when MR is zero: total revenue reaches a maximum where marginal revenue becomes zero

TR falls when MR is negative

TR falls when MR is negative: negative marginal revenue means additional sales reduce total revenue

Try these sample MCQs

1. Which concept best matches this situation? Selling 10 units at ₹20 each gives TR ₹200.

  1. Average revenue
  2. Total revenue
  3. AR as firm demand curve
  4. MR below AR
Check answer and explanation

Total revenue. Total revenue: the total receipts from sale of output, equal to price multiplied by quantity sold

2. Which concept best matches this situation? TR ₹200 from 10 units gives AR ₹20.

  1. Marginal revenue
  2. AR = MR under constant price
  3. Average revenue
  4. TR rises when MR is positive
Check answer and explanation

Average revenue. Average revenue: total revenue per unit sold and therefore equal to price

3. Which concept best matches this situation? TR rises from ₹200 to ₹218 when one more unit is sold, so MR is ₹18.

  1. AR as firm demand curve
  2. Downward-sloping AR
  3. TR maximum when MR is zero
  4. Marginal revenue
Check answer and explanation

Marginal revenue. Marginal revenue: the change in total revenue from selling one additional unit

After the quiz

Write down the concepts you missed. Explain each one in your own words, give an example, and attempt the level again without notes. A high score on a short quiz does not replace revision of the whole chapter.

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