Advertisements
Advertisements
प्रश्न
Giving reason, state whether the following statement is true or false.
When equilibrium price of a good is less than its market price, there will be competition among the sellers.
Advertisements
उत्तर
True, when equilibrium price of a good is less than its market price, there will be competition among the sellers. In the diagram, the equilibrium price and quantity are OP and OQ. As the equilibrium price is low for farmers, the government fixes the price floor, i.e. the price level increased from OP to OP1 which leads to a decline in the quantity demand, and therefore, there is excess supply in the market. Here, the competition will increase among the sellers, and hence, the price will come down to the equilibrium point where market demand is equal to market supply.
APPEARS IN
संबंधित प्रश्न
Explain the chain effects, if the prevailing market price is below the equilibrium price.
Explain the chain of effects of excess supply of a good on its equilibrium price
Explain the chain of an effect of excess demand of a good on it equilibrium price.
Explain the meaning of excess demand and excess supply with the help of a schedule. Explain their effect on equilibrium price.
Distinguish between Gross domestic product at a market price and Gross domestic product at factor cost.
Write explanatory answer.
Define perfect competition and explain price determination under perfect competition.
Define or Explain the General equilibrium.
At what level of price do the firms in a perfectly competitive market supply when free entry and exit is allowed in the market? How is the equilibrium quantity determined in such a market?
Explain the following concept:
Price discrimination
Define or explain the following concept:
Equilibrium price
Fill in the blank with appropriate alternative given below
The price at which demand and supply equate to each other is called _______ price.
Suppose the demand and supply equations of a commodity X in a perfectly competitive market are given by :
Qd = 1700 – 2P
Qs = 1300 + 3P
Calculate the value of equilibrium price and equilibrium quantity of the commodity X.
State whether the following statement is true or false. Give reasons for your answer :
When the equilibrium price is greater than the market price there will be excess supply in the market.
Answer the following question:
The market for a good is in equilibrium. How would an increase in an input price affect the equilibrium price and equilibrium quantity, keeping other factors constant? Explain using a diagram.
