Download App

Market Equilibrium — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsMarket Equilibrium6 Marks
Question
State whether the following statements are true or false. Give reasons for your answer:
  1. When equilibrium price is greater than market price there will be excess supply in the market.
  2. X and Y are complementary goods. A fall in the price of Y will result in a rise in the price of X.
✓

Answer

  1. False, because since market price is lower than equilibrium price, market demand will be higher than market supply leading to excess demand.
  2. True. When price of Y falls,its demand rises. Since X is complementary of Y, and both must be used together, demand for X increases. Since the rise in demand for X is due to a factor other than own price of X, price of X increases.

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 "6 Marks Question" from Market Equilibrium→Market Equilibrium — all question types→Economics STD 11 Commerce question papers→CBSE Board STD 11 Commerce question papers→CBSE Board question paper generator→

Similar questions

Explain, with the help of numerical examples, the effect on total output of a good when all the inputs used in production of that good are increased simultaneously and in the same proportion.
→
Define price elasticity of demand. Explain its various degrees. Use diagrams.
→
Explain the conditions of consumer's equilibrium using indifference curve analysis.
OR
consumer consumes only two goods. Explain the conditions of consumer equilibrium with the help of indifference curve analysis. Use diagram.
OR
Explain the conditions of consumer equilibrium with the help of indifference curve analysis. Use diagram.
OR
Use indifference curve approach, explain the conditions of consumer's equilibrium.
OR
What are the conditions of consumer's equilibrium under indifference curve approach? What changes will take place if the conditions are not fulfilled to reach equilibrium?
→
How do the equilibrium price and quantity of a commodity change when price of input used in its production changes?
→
What is the supply curve of a firm in the long run?
→
Given below is a cost and revenue schedule of a producer. At what level of output is the producer in equilibrium? Give reasons for your answer:
Output (units) Price (₹) Total Cost (₹)
1 10 13
2 10 22
3 10 30
4 10 38
5 10 47
6 10 57
7 10 71
→
Explain briefly the three features of perfect competition.
→
Explain through a diagram the effect of a rightward shift of both the demand and supply curves on equilibrium price and quantity.
→
What do you mean by excess demand? Explain with the help of a diagram as to what will be the effect of an excess demand on the price of the commodity.
OR
At a given price of a commodity, there is excess demand. Is this price an equilibrium price? If not, how will the equilibrium price be reached? Use diagram.
→
Explain the relationship between:
  1. Prices of other goods and demand for the given good.
  2. Income of the buyers and demand for a good.
→