  squash                                       In doing this, we shall first have to deduce the graphical shapes of the average revenue, marginal revenue and total revenue cards. Before going to discuss the relationship between these revenue concepts, let us make a point clear here. These revenue concepts have a direct relationship with the market structure under which form it is operating. The structure of the market affects the shapes of the revenue cards. We shall discuss the different forms of market structure later. For the timing, let us consider that there are two broad classification markets namely perfect competition and imperfect competition. Perfect competition is described as the market where there are large number of buyers and sellers and no individual participant is large enough to have the market power to set the price of a homogeneous product. As such, the seller can supply any amount of the product at the existing market price and the buyer also can buy any amount of the product. However, no seller or no buyer can individually influence the market price. Again, the products of the different sellers are homogeneous. No differences among the products exist. The essence of perfect competition implies that the market is imperfect. In an imperfectly competitive market, the seller may have control over the market price. Thus, a seller under imperfect competition may have absolute control over the market price or a limited control over it only. This is basically depends on the type of the market. However, there exist many forms of imperfect competition and the degree of control of the seller over the market price depends on the form of the market the seller operates in. Let us now analyze the shapes of the total revenue, average revenue and marginal revenue curves under the two broad market forms of perfect competition and imperfect competition. Now, let us first consider total revenue, average revenue and marginal revenue curves of a firm under perfect competition. As we have already mentioned, a firm under perfect competition has to accept the prevailing market price and can sell any amount of the output at the prevailing market price. Thus, a firm under perfect competition will earn average revenue, total revenue and marginal revenue similar to the following table 6.1. Now, in this table, we can see the price is 14 and at this price, the seller can sell any amount of the product. When he sells one unit, he receives 14, total revenue also 14, marginal revenue is also 14. When he sells three units at a price of 14, he receives total revenue 28, marginal revenue is again 14. When he sells three units at a price of 14, total revenue he earns is 42, marginal revenue again is 14. When he sells four units at a price of 14, his total revenue is 56, his marginal revenue again is 14, 56 minus 42 is 14. Again, he sells five units at a price of 14, his total revenue is 70 and his marginal revenue is 40. From the figure, we have an alongside figure and when you put this data in the alongside figure, it looks like this. You can see the figure. So, from the figure, it is obvious that the total revenue curve of the firm is an upward rising straight line. This curve in fact represents the total supply of a firm. The average revenue and marginal revenue curves. As we have already mentioned, under perfect competition, the market price for the product is fixed and the seller has no influence to alter the same. Again, the seller can supply any amount of the commodity at the prevailing market price. Thus, the prevailing market price also becomes the average revenue and marginal revenue of the firm. This is clear from above table 6.1. We have already explained this. Now from the table, it is also clear that the prevailing market price is 14 is also the average revenue and marginal revenue of the firm. Thus, the same of the average revenue curve and the marginal revenue curve will be the same. This has been shown with the help of the following figure 6.2. And it can be seen from figure 6.2 that the firms, AR and MR curves are the same. The slope of the curve is horizontal. Average revenue and marginal revenue and total revenue curves of a firm under imperfect competition. Unlike perfect competition, a firm under imperfect competition does not have to sell its entire amount of the product at a fixed market price. This is the basic difference between perfect competition and imperfect competition. This means that the firm can sell more units of the product as its price falls. We have shown a hypothetical schedule of average revenue, total revenue and marginal revenue in table 6.2. Here it is seen that when the price or average revenue was 20, the seller sells 1 unit and total revenue is 20, marginal revenue is 20. Now at price 19, he sells 3 units of the product, total revenue becomes 38, marginal revenue here is 18. 38 minus 12 is 18. Similarly, when he sells 3 units at price 18, total revenue becomes 54. But his marginal revenue becomes 16. 54 minus 38. Similarly, we can see that at night unit, when he sells 9 units at price 12, that means he lowers the price to sell more units, then his total revenue is 108 but his marginal revenue comes down to 4. When he sells 10 units at price 11, total revenue is 110 and marginal revenue comes out to 2. When he sells 11 units at price 10, he gets 110 rupees as total revenue. This is similar to the 110 rupees when he sells 10 units at 11 rupees. So, in this case, when he sells 11 units at price 10 per unit, he gets 110 rupees total revenue but his marginal revenue is 0. Similarly, when he sells 12 units of the product at price 9, total revenue becomes 108 but marginal revenue becomes minus 2. 110 in the previous case minus 108. So, it's minus 2. When he increases sales to 30 units by reducing his price to 8, his total revenue will become 104 but his marginal revenue comes down to minus 4. That is 108 minus 104. From the above table, it can be seen that as average revenue declines by 1 rupee with a number of units sold being reached by 1 unit, marginal revenue declines by 2 rupees. Again, total revenue is maximum when MR equals to 0. After that, marginal revenue becomes negative and total revenue tends to decline. This has been shown in FICA 6.3. From FICA 6.3, you can see that unlike perfect competition, firms average revenue and marginal revenue curves under imperfect competition are not the same. However, both the curves are downward sloping. Again, the slope of the marginal revenue curve is twice as much steeper as that of the average revenue curve. This is because it can be seen from the above table 6.2 that as sales increases by 1 unit, average revenue falls by 1 rupee while marginal revenue falls by 2 rupees. Thus, if we draw a perpendicular line on the y-axis from any point of the average revenue curve, say AB as shown in the figure, the MR curve will cut it in the middle. Thus, average cost is half of, thus AC is half of AB. Again, it can be seen that total revenue continues to rise until MR equals to 0. Thereafter, as MR tends to become negative, total revenue tends to decline. Thus, the shape of social revenue curve under imperfect competition is different from that of perfect competition. In the next video, we shall discuss the relationship between total revenue, average revenue and marginal revenue and the price list to demand. Along with that, we shall have a brief review of these three videos in terms of having certain obstructive circular movement question in the next video. Thank you.