Class 12 Micro Economics - Chapter Market Equilibrium NCERT Solutions | Explain market equilibrium.

How will a change in the price of coffee affect the equilibrium price of tea? Explain the effect on equilibrium quantity also through a diagram. 

Suppose the price at which the equilibrium is attained in exercise 5 is above the minimum average cost of the firms constituting the market. Now if we allow for free entry and exit of firms, how will the market price adjust to it?

When do we say that there is an excess demand for a commodity in the market?

Suppose the market determined rent for apartments is too high for common people to afford. If the government comes forward to help those seeking apartments on rent by imposing control on rent, what impact will it have on the market for apartments?

When do we say that there is an excess supply for a commodity in the market?

In what respect do the supply and demand curves in the labor market differ from those in the goods 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?

Explain how price is determined in a perfectly competitive market with a fixed number of firms.

How is the optimal amount of labor determined in a perfectly competitive market?

Explain through a diagram the effect of a rightward shift of both the demand and supply curves on equilibrium price and quantity.

Explain the concept of a production function

What would be the shape of the demand curve so that the total revenue curve is?

(a) A positively sloped straight line passing through the origin?

(b) A horizontal line?

Discuss the central problems of an economy.

What are the characteristics of a perfectly competitive market?

What do you mean by the budget set of a consumer?

What is the total product of input?

From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:

What do you mean by the production possibilities of an economy?

How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?

What is budget line?

What is the total product of input?

What is the supply curve of a firm in the long run?

What does the price elasticity of supply mean? How do we measure it?

What is the ‘price line’?

Can there be some fixed cost in the long run? If not, why?

What is the average product of an input? 

Suppose the price elasticity of demand for a good is – 0.2. If there is a 5 % increase in the price of the good, by what percentage will the demand for the good go down?

Suppose there are 20 consumers for a good and they have identical demand functions: 

d(p)=10–3pd(p)=10–3p for any price less than or equal to 103103 and d1(p)=0d1(p)=0 at any price greater than 103.

Explain why the budget line is downward sloping.

Suppose a consumer’s preferences are monotonic. What can you say about her preference ranking over the bundles (10, 10), (10, 9) and (9, 9)?