Frank solutions for Economics [English] Class 12 ISC chapter 6 - Market Mechanism: Equilibrium Price and Quantity in a Competitive Market [Latest edition]

In a competitive market, the equilibrium price is determined when ______.

What is determined at the point of intersection of the market demand and market supply curves?

If the quantity demanded of a commodity in the market exceeds the quantity supplied at a particular price, such a situation is known as ______.

If the quantity supplied of a commodity in the market is more than the quantity demanded, such a situation is known as ______.

An increase in the demand for a commodity (rightward shift of the demand curve) would result in ______.

An increase in the supply of a commodity (rightward shift of supply curve) causes ______.

What will be the effect on equilibrium price and quantity when increase in demand is equal to increase in supply?

What will be the effect upon equilibrium price when an increase in demand is greater than increase in supply?

When the government intervenes in the functioning of the market by fixing a ‘price ceiling’ of an essential commodity to protect the interest of the consumers, at what level the price ceiling must be fixed to be meaningful:

When the government intervenes in the functioning of the market to protect the interest of the farmers by fixing the floor price (minimum support price) at which the traders have to buy the food-grains from them, the price is fixed at the level of ______.

Define equilibrium.

What is the equilibrium price?

When is market said to be in a state of equilibrium?

What is equilibrium quantity?

Define excess demand.

What is excess supply?

What is a stable equilibrium?

‘Demand and supply are two blades of a scissor.’ Explain.

Which is more important in determining equilibrium price, demand or supply?

Distinguish between the excess demand and excess supply.

What is ‘excess demand’?

What is excess demand’s impact on the equilibrium output and price?

What is the equilibrium price?

What changes may take place in the market when the prevailing price is greater than the equilibrium price?

What happens to the equilibrium price of a good when demand for that good increases?

What happens to the equilibrium price of a good when supply of that good increases?

Show with the help of diagrams the effect on equilibrium price and quantity when there is a fall in the price of substitute goods.

Show with the help of a diagram the effect on equilibrium price and quantity when there is a rise in the prices of inputs.

What would be the effect on equilibrium price when demand and supply increase by the same magnitude?

When will an increase in demand lead to an increase in price but no change in the quantity supplied?

When will a change in demand have no impact on the equilibrium price of a commodity? Show with the help of a diagram.

When will an increase in demand lead to an increase in price but no change in the quantity supplied?

When will a change in supply will have no effect on the price of a commodity?

When does changes in supply have no effect on the equilibrium quantity?

With the help of a diagram, show how equilibrium price and quantity of a commodity are affected when demand is perfectly elastic and supply decreases.

With the help of a diagram, show how equilibrium price and quantity of a commodity are affected when supply is perfectly elastic and demand increases.

What is price ceiling?

Explain price ceiling with the help of a diagram.

What is floor price?

Illustrate the floor price diagrammatically.

Differentiate between price ceiling and floor price.

Why is price ceiling resorted by the government?

What is meant by black-marketing?

Why is a price floor followed by the government?

Give some examples of fixation of price floor in India.

What is meant by buffer stock?

Explain diagrammatically how equilibrium price and equilibrium quantity are affected by changes in the demand for a commodity, with the supply remaining constant.

Given the following information, identify the equilibrium price and quantity.

What will happen if the market price is:

1. ₹ 10
2. ₹ 7

Explain what happens when the market price is less than the equilibrium price.

Explain what happens when the market price is more than the equilibrium price.

With the help of diagrams, show the effect of a change in demand (or shift in demand curves) on equilibrium price and quantity of a commodity when Supply curve is perfectly elastic.

With the help of diagrams, show the effect of a change in demand (or shift in demand curves) on equilibrium price and quantity of a commodity when the supply curve is perfectly inelastic.

Using diagrams, explain when equilibrium price does not change with a change in supply.

Explain the concept of Maximum Price Legislation with the help of a diagram.

What is floor price?

Explain the floor price impact on producers.

What is the equilibrium price?

How is equilibrium price determined? Show it diagrammatically.

What is meant by equilibrium?

What is the equilibrium price?

Illustrate, using appropriate diagrams, the effect of change in demand on equilibrium price.

Explain the determination of price of a commodity in a competitive market with the help of a diagram. What will happen if price is more than the equilibrium price?

Explain the determination of the price of a commodity in a competitive market with the help of a diagram. What will happen if the price is less than the equilibrium price?

Explain how equilibrium price can be determined with the help of demand and supply schedules.

Explain how the equilibrium price can be determined with the help of demand and supply curves.

Show, with the help of a diagram, the effect of the following change on the equilibrium price:

When the demand for a commodity alone increases.

Show, with the help of a diagram, the effect of the following change on the equilibrium price:

When the supply of a commodity alone increases.

How is equilibrium price determined? Show it diagrammatically.

How is equilibrium price affected by changes in demand for the commodity (shift in demand curves)?

How is the equilibrium price of a commodity affected by changes in its supply (shift in supply curves)?

Changes in both demand and supply of a commodity may or may not affect its equilibrium price. Explain.

Why will the equilibrium price of a commodity not change even if its demand and supply both increase? Explain with the help of a diagram.

Explain the effect of a simultaneous increase in both demand and supply on equilibrium price and quantity.

Why will the equilibrium price of a commodity not change even if its demand and supply both increase? Explain with the help of a diagram.

Explain with the help of diagrams how equilibrium price and quantity change when both demand and supply decrease (both demand and supply curves shift to the left).

With the help of a diagram, show the effect of a change in supply (or shift in supply curves) on the price and quantity sold in the following situation:

When the demand curve is perfectly inelastic.

With the help of a diagram, show the effect of a change in supply (or shift in supply curves) on the price and quantity sold in the following situation:

When the demand curve is perfectly elastic.

With the help of diagrams, show the effect of a change in demand (or shift in demand curves) on equilibrium price and quantity of a commodity when Supply curve is perfectly elastic.

With the help of diagrams, show the effect of a change in demand (or shift in demand curves) on equilibrium price and quantity of a commodity when the supply curve is perfectly inelastic.

How do the following affect the equilibrium price and quantity? Show graphically.

A change in consumers’ tastes in favour of the product

How do the following affect the equilibrium price and quantity? Show graphically.

A reduction in consumers’ income

How do the following affect the equilibrium price and quantity? Show graphically.

An increase in the price of complementary goods.

Show with the help of diagrams the effect on equilibrium price and quantity when there is a fall in the price of substitute goods.

Show with the help of a diagram the effect on equilibrium price and quantity when there is a rise in the prices of inputs.

What is the effect of price ceiling on equilibrium price and output?

How is the problem of allocating limited supply tackled?

Explain the rationale of the policy of fixation of floor price.

Explain the implication of the policy of fixation of floor price.

From a demand function Q_d = 2000 − 30 P and a supply function Q_s = 20 P, find out

1. equilibrium price
2. equilibrium quantity

Suppose the wages of labourers in an economy are low because of excess supply of labour. In order to help the labourers, the government enacts a legislation to fix minimum wages above the equilibrium level as determined by the free play of the market forces of demand and supply. Explain the implications of such a policy with the help of an appropriate diagram.