Class 12 Micro Economics - Chapter Market Equilibrium NCERT Solutions | Suppose the demand and supply curve of c

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?

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

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

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?

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

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

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? 

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?

There are three identical firms in a market. The following table shows the supply schedule of firm 1. Compute the market supply schedule.

Briefly explain the concept of the cost function. 

The following table shows the total cost schedule of a competitive firm. It is given that the price of the good is Rs 10. Calculate the profit at each output level. Find the profit maximising level of output.

Why does the SMC curve cut the AVC curve at the minimum point of the AVC curve? 

What do you mean by substitutes? Give examples of two goods which are substitutes of each other.

What do you mean by a normal good?

Consider the demand curve D (p) = 10 – 3p. What is the elasticity at price 53?

What does the average fixed cost curve look like? Why does it look so? 

What is budget line?

Explain price elasticity of demand.