Quantity of a commodity which is bought and sold at the equilibrium price is called?
Maximum quantity
Minimum quantity
Both (a) and (b)
Equilibrium quantity
D.
Equilibrium quantity
A price at which a consumer is willing to buy and a seller is willing to sell the commodity is called.
Minimum Price
Maximum Price
Equilibrium Price
None of the above
C.
Equilibrium Price
Explain why the equilibrium price of a commodity is determined at that level of output at which its demand equals its supply.
Suppose demand is greater than supply. Since the buyers will not be able to buy all what they want, there will be competition among the buyers. It will have an upward influence on the price. As a result, demand will start falling and supply starts rising. It will go on till the demand is equal to supply again. If demand is less than supply, the sellers will not be able to sell all what they want, there will be competition among the sellers. It will have a downward influence on the price. As a result, demand will start rising and supply starts falling. It will go on till the demand is equal to supply again. Hence, the equilibrium price of a commodity is determined at that level of output at which its demand equals its supply.
At a given price, when demand for commodity is more then supply of the commodity then it is called excess demand. Here given price is:
less than equilibrium price
more than equilibrium price
less than or equal to equilibrium price
More than or equal to equilibrium price
A.
less than equilibrium price
At a given price, when demand for commodity is more than supply of the commodity then it is called excess demand. Here given price is
less than equilibrium price
more than equilibrium price
less than or equal to equilibrium price
More than or equal to equilibrium price
A.
less than equilibrium price
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