Question
Market for a good is in equilibrium. There is decrease in supply for this good. Explain the chain of effects of this change. Use diagram.###Explain the chain effects of decrease in supply of a good on its price, supply and demand.
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.
Explore more
Similar questions
Giving reason explain how should the following be treated in estimation of national income:
- Expenditure by a firm on payment of fees to a chartered accountant.
- Payment of corporate tax by a firm.
- Purchase of refrigerator by a firm for own use.
Calculate (a) national income (b) net national disposable income:
| Rs. in crores | ||
| (i) | Net factor income to abroad | (–) 50 |
| (ii) | Net indirect taxes | 800 |
| (iii) | Net current transfers from rest of the world | 100 |
| (iv) | Net imports | 200 |
| (v) | Private final consumption expenditure | 5000 |
| (vi) | Government final consumption expenditure | 3000 |
| (vii) | Gross domestic capital formation | 1000 |
| (ix) | Change in stock | (–) 50 |
| (x) | Mixed income | 4000 |
| (xi) | Scholarship to students | 80 |
Calculate:
| Quantity | TFC | TC | MC | TVC | AFC | AC | AVC |
| 0 | | | | | | | |
| 1 | | | | | | | |
| 2 | | | | | | | |
| 3 | | | | | | | |
| 4 | | | | | | | |
| 5 | | | | | | | |
| 6 | | | | | | | |
| 7 | | | | | | | |
| 8 | | | | | | |
- AFC for 5 units of output is Rs 2,000.
- AVC for 4 units of output is Rs850.
- TC rises by Rs 1,240 when the 6th unit of output is produced.
- AC for 5 units of output is Rs 2,880. \
- It costs 1,000 more to produce 1 unit of output than to produce nothing.
- TC for 8 units of output is 19,040.
- TVC increases by Rs 1,535 when the seventh unit of output is produced.
- AFC plus AVC for 3 units of output is Rs 4,135.
- AC falls by * 5,100 when output rises from 1 to 2 units.
Calculate Total Cost and Average Variable Cost of a firm at each given level of output from its cost schedule given below:
| Output (units) | 1 | 2 | 3 | 4 | 5 | 6 |
| Average Fixed Cost (AFC) (₹) | 60 | 30 | 20 | 15 | 12 | 10 |
| Marginal Cost (MC) (₹) | 32 | 30 | 28 | 30 | 35 | 43 |
How should the following be treated in estimating national income of a country? You must give reason for your answer.
- Taking care of aged parents.
- Payment of corporate tax.
- Expenditure on providing police services by the government.
A producer starts a business by investing his own savings and hiring the labour. Identify implicit and explicit costs from this information. Explain.
Explain the conditions of producer’s equilibrium with the help of a numerical example. Use marginal cost and marginal revenue approach.
A firm’s SMC schedule is shown in the following table. The total fixed cost of the firm is Rs 100. Find the TVC, TC, AVC and SAC schedules of the firm.
| Q | SMC |
| 0 1 2 3 4 5 6 | - 500 300 200 300 500 800 |
Explain the distinction between "change in quantity supplied" and "change in supply." Use diagram.