Class 12 Micro Economics - Chapter Market Equilibrium NCERT Solutions | Can you think of any commodity on which
Can you think of any commodity on which the price ceiling is imposed in India? What may be the consequence of price-ceiling?
In India, there are many goods on which government has imposed price ceiling, in order to keep them available within the reach of the BPL (below poverty lime) people. These goods are kerosene, sugar, wheat, rice, etc. The following are the consequences of price ceiling:
1) Excess demand - Due to artificially imposed price, cutting lower than the equilibrium price leads to the emergence of the problem of excess demand.
2) Fixed Quota - Each consumer gets a fixed quantity of good (as per the quota). The quantity often falls short of meeting the individuals requirements. This further leads to the problem of shortage and the consumer remains unsatisfied.
3) Inferior goods - Often it has been found that the goods that are rationed are usually inferior goods and are adulterated.
4) Black marketing - The needs of a consumer remain unfulfilled as per the quota laid by the government. Consequently, some of the unsatisfied consumers get ready to pay higher price for the additional quantity. This leads to black-marketing and artificial shortage in the market.
More Questions From Class 12 Micro Economics - Chapter Market Equilibrium
- Q:-
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.
- Q:-
When do we say that there is an excess demand for a commodity in the market?
- Q:-
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?
- Q:-
How are equilibrium price and quantity affected when income of the consumers
a) Increase
b) Decrease
- Q:-
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?
- Q:-
Explain market equilibrium.
- Q:-
Explain through a diagram the effect of a rightward shift of both the demand and supply curves on equilibrium price and quantity.
- Q:-
Explain how price is determined in a perfectly competitive market with a fixed number of firms.
- Q:-
How is the optimal amount of labor determined in a perfectly competitive market?
- Q:-
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?
Popular Questions of Class 12 Micro Economics
- Q:-
Explain the concept of a production function
- Q:-
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?
- Q:-
Discuss the central problems of an economy.
- Q:-
What are the characteristics of a perfectly competitive market?
- Q:-
What do you mean by the budget set of a consumer?
- Q:-
What is the total product of input?
- Q:-
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity
1
2
3
4
5
6
7
8
9
Marginal
Revenue
10
6
2
2
2
0
0
0
-
- Q:-
What do you mean by the production possibilities of an economy?
- Q:-
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
- Q:-
What is budget line?
Recently Viewed Questions of Class 12 Micro Economics
- Q:-
Will a profit-maximising firm in a competitive market produce a positive level of output in the short run if the market price is less than the minimum of AVC? Give an explanation.
- Q:-
How does an increase in the number of firms in a market affect the market supply curve?
- Q:-
Consider a market with two firms. In the following table, columns labelled as SS1 and SS2 give the supply schedules of firm 1 and firm 2 respectively. Compute the market supply schedule.
Price (Rs.) SS1 (kg) SS2 (kg) 0
1
2
3
4
5
6
7
80
0
0
1
2
3
4
5
60
0
0
0
0.5
1
1.5
2
2.5 - Q:-
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)?
- Q:-
If duo poly behavior is one that is described by Cornet, the market demand curve is given by the equation q = 200 - 4p and both the firms have zero costs, find the quantity supplied by each firm in equilibrium and the equilibrium market price.
- Q:-
Explain why the budget line is downward sloping.
- Q:-
Distinguish between a centrally planned economy and a market economy.
- Q:-
Discuss the subject matter of economics.
- Q:-
The market demand curve for a commodity and the total cost for a monopoly firm producing the commodity are given in the schedules below.
Quantity
0
1
2
3
4
5
6
7
8
Price
52
44
37
31
26
22
19
16
13
Quantity
0
1
2
3
4
5
6
7
8
Price
10
60
90
100
102
105
109
115
125
Use the information given to calculate the following:
(a) The MIR and MC schedules
(b) The quantities for which MIR and MC are equal
(c) The equilibrium quantity of output and the equilibrium price of the commodity
(d) The total revenue, total cost and total profit in the equilibrium
- Q:-
What do you understand by normative economic analysis?
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