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Question
Observe the following table and answer the questions:
| Price of a banana (per dozen) in ₹ | Demand (in dozen) | Supply (in dozen) | Relation between DD and SS |
| 10 | 500 | 100 | DD > SS |
| 20 | 400 | _____ | DD > SS |
| 30 | _____ | 300 | DD = SS |
| 40 | 200 | _____ | DD < SS |
| 50 | ______ | 500 | DD < SS |
- Fill in the blanks in the above schedule.
- Derive the equilibrium price from the above schedule with the help of a suitable diagram.
Answer in Brief
Diagram
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Solution
a.
| Price of a banana (per dozen) in ₹ | Demand (in dozen) | Supply (in dozen) | Relation between DD and SS |
| 10 | 500 | 100 | DD > SS |
| 20 | 400 | 200 | DD > SS |
| 30 | 300 | 300 | DD = SS |
| 40 | 200 | 400 | DD < SS |
| 50 | 100 | 500 | DD < SS |
b.
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Chapter 5: Forms of Market - EXERCISE [Page 52]
RELATED QUESTIONS
State with reasons whether you agree or disagree with the following statement.
Price under perfect competition is decided by the interaction between demand and supply.
Study the following diagram and answer the questions:
Questions:
- Prepare a hypothetical schedule for market demand and supply for the given market.
- State the equilibrium price and corresponding market demand and market supply for the given market.
What is meant by equilibrium price under perfect competition?
What is the main idea of Marshall’s scissors analogy in price determination?
In the apple example, why is ₹300 called the equilibrium price?
What happens when the market price is set below the equilibrium price?
Under perfect competition, how is the price faced by an individual firm best described?
