Download App

Market Equilibrium — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsMarket Equilibrium4 Marks
Question
Market for a good is in equilibrium. There is simultaneous "decrease" both in demand and supply of the good. Explain its effect on market price.
✓

Answer

There are three possibilities:
  1. If the relative (percentage) decrease in demand is greater than the decrease in supply, price will fall.
The price will fall because of excess supply in the market.
  1. If the relative (percentage) decrease in demand is less than the decrease in supply price will rise.
The price will rise because of excess demand in the market.
  1. If the relative (percentage) decrease in demand is equal to the decrease in supply, price will remain unchanged.
The price will remain unchanged because there is neither excess demand nor excess supply in the market.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Explore more

More "4 Marks Question" from Market Equilibrium→Market Equilibrium — all question types→Economics STD 12 Humanities & Commerce question papers→Rajasthan Board STD 12 Humanities & Commerce question papers→Rajasthan Board question paper generator→

Similar questions

Given a consumption curve, outline the steps required to be taken in deriving a saving curve from it. Use diagram.
→
Calculate National Income and Gross National Disposable Income from the following:
  (Rs. Crore)
  1. Net current transfers to the rest of the world

(-)5
  1. Private final consumption expenditure

500
  1. Consumption of fixed capital

20
  1. Net factor income to abroad

(-)10
  1. Government final consumption expenditure

200
  1. Net indirect tax

100
  1. Net domestic fixed capital formation

120
  1. Net imports

30
  1. Change in stocks

(-)20
→
Explain determination of equilibrium level of income using ‘consumption plus investment’ approach. Use diagram.
→
Explain ‘saving function’ with the help of a schedule and diagram.
→
From the following schedule find out the level of output at which the producer is in equilibrium. Calculate profit. Give reasons for your answer.
Output(Units)
1
2
3
4
5
6
7
Price (Rs.)
24
24
24
24
24
24
24
Total Cost (Rs.)
26
50
72
92
115
139
165
→
Commodities X and Y have equal Price Elasticity of Supply. The supply of X rises from 400 units to 500 units due to a 20% rise in its price. Calculate the percentage fall in supply of Y if its price falls by 8%.
→
Explain the problem of ‘excess demand’ in an economy with the help of a diagram. Explain the role of bank rate in correcting it.
→
How is S and I approach derived from AD and AS approach of income determination. Use diagram.
→
Explain 'non-monetary exchanges' as a limitation of using gross domestic product as an index of welfare of a country.
→
Calculate (a) National Income, and (b) Net National Disposable Income:
    ₹ (in crores)
(i) Compensation of employees 2,000
(ii) Rent 400
(iii) Profit 900
(iv) Dividend 100
(v) Interest 500
(vi) Mixed income of self-employed 7,000
(vii) Net factor income to abroad 50
(viii) Net exports 60
(ix) Net indirect taxes 300
(x) Depreciation 150
(xi) Net current transfers to abroad 30
→