Commerce (English Medium) Class 12 - CBSE Question Bank Solutions

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?

If the price of a substitute Y of good X increases, what impact does it have on the equilibrium price and quantity of good X?

Suppose the demand and supply equations of a commodity X in a perfectly competitive market are given by :
Q_d = 1700 – 2P
Q_s = 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.

What is maximum price ceiling? Explain its implications.

What is minimum price ceiling? Explain its implications.

What is meant by price ceiling? Explain its implications.

When is a firm called ‘price-taker’?

Can you think of any commodity on which price ceiling is imposed in India? What may be the consequence of price-ceiling?

Answer the following question.
Explain the meaning and implications of the maximum price ceiling and minimum price ceiling.

Define cost.

Define externalities. Give an example of negative externality. What is its impact on welfare?

Give two examples of fixed costs.

Define fixed cost. Give an example.

Sale of petrol and diesel cars is rising particularly in big cities. Analyse its impact on gross domestic product and welfare.

Government spends on child immunization programme. Analyse its impact on Gross Domestic Product and welfare of the people.

What is the behaviour of (a) Average Fixed Cost and (b) Average Variable Cost as more and more units of a good are produced?

If the Real GDP is Rs400 and Nominal GDP is Rs450, calculate the Price Index (base = 100).

Define price floor. Explain the implications of price floor.