Q9 of 50 Page 1

Define demand. Name the factors affecting market demand.

Demand means the quantity of a good a person is willing to buy at a given price during a period of time.

The factors that affect market demand are:


a) The price of the good.


b) The price of related goods


c) Income of the buyer


d) Number of consumers


e) Tastes and preferences of the consumer


f) The distribution of income


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What will be the effect of a 10 per cent rise in the price of a good on its demand if the price elasticity of demand is (a) Zero, (b) 21, (c) 22?

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What is the minimum price ceiling? Explain its implications.

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If the prevailing market price is above the equilibrium price, explain its chain of effects.

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Define fixed cost. Give an example. Explain with the reason the behaviour of Average Fixed Cost as output is increased.

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When the price of a commodity falls from ` 12 per unit to ` 9 per unit, the producer

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