Q7 of 30 Page 1

Using appropriate schedules, briefly describe the determination of market equilibrium.


Market equilibrium is achieved when demand is equal to supply. If we look to the table then at a price Rs3 quantity demanded is 20 and the quantity supplied is also 20


More from this chapter

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5

State any one assumption for the construction of the curve that shows the possibilities of

potential production of two goods in an economy.

 6

State the behaviour of Marginal Physical Product, under Returns to a Factor.

 8

“In a hypothetical market of mobile phones, the brand AWAAZ was leading the market

share. Its nearest competitor VAARTA suddenly changed its strategy by bringing in a new


model of the mobile phone at a relatively lesser price. In response, AWAAZ too slashed its


price.”


Based on the above information, identify the form of the market represented and discuss any one


a feature of the market.


Or


Discuss the primary reason for ‘indeterminateness of demand curve’ under the oligopoly form of market.

 9

a. Arrange the following coefficients of price elasticity of demand in ascending order:

-0.7, -0.3, -1.1, -0.8


b. Comment upon the degree of elasticity of demand for Good X, using the total outlay


method, if the price of X falls from 18 per unit to 13 per unit and its quantity demanded


rises from 50 units to 100 units. (1+3)