Question

Draw a market equilibrium graph using the following demand schedule.

Price (₹)	10	20	30	40	50
Q.D. (kg)	5	10	15	20	25
Q.S. (kg)	25	20	15	10	5

1. Plot the demand and supply curve using the above data.
2. Identify the equilibrium price and quantity.
3. Observe the above data and analyse what happens if the price is set at ₹20 or ₹40.

Answer 1

1. The demand curve slopes upward, and the supply curve slopes downward using the given data.
   
2. Equilibrium Price = ₹ 30
   Equilibrium Quantity = 15 kg
3. At ₹20, there is excess supply. At ₹40, there is excess demand. The market moves towards the equilibrium price of ₹30. Equilibrium price = ₹30, where demand equals supply.