Class 12 Micro Economics - Chapter Market Equilibrium NCERT Solutions | In what respect do the supply and demand

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. 

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

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?

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?

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

How are equilibrium price and quantity affected when income of the consumers

a) Increase

b) Decrease

Explain market equilibrium.

Suppose the demand and supply curves of salt are given by:

(a) Find the equilibrium price and quantity.

(b) Now, suppose that the price of an input that used to produce salt has increased so, that the new supply curve is qs = 400 + 3p

How does the equilibrium price and quantity change? Does the change conform to your expectation?

(a) Suppose the government has imposed at ax of Rs 3 per unit of sale on salt. How does it affect the equilibrium rice quantity? 

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

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

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 supply curve of a firm in the short run?

What is the law of variable proportions? 

Consider a market with two firms. The following table shows the supply schedules of the two firms: the SS₁ column gives the supply schedule of firm 1 and the SS₂ column gives the supply schedule of firm 2. Compute the market supply schedule.

Compute the total revenue, marginal revenue and average revenue schedules in the following table. Market price of each unit of the good is Rs 10.

What is meant by prices being rigid? How can oligopoly behavior lead to such an outcome? 

Explain price elasticity of demand.

Suppose there was a 4 % decrease in the price of a good, and as a result, the expenditure on the good increased by 2 %. What can you say about the elasticity of demand?

If a consumer has monotonic preferences, can she be indifferent between the
bundles (10, 8) and (8, 6)?

Comment on the shape of MR curve in case when TR curve is a

(a) Positively sloped straight line

(b) Horizontal straight line

What happens to the budget set if both the prices as well as the income double?