Download App

MICROECONOMICS CH : 13 MARKET EQUILIBRIUM UNDER PERFECT COMPETITION AND EFFECTS OF SHIFTS IN DEMAND AND SUPPLY — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsMICROECONOMICS CH : 13 MARKET EQUILIBRIUM UNDER PERFECT COMPETITION AND EFFECTS OF SHIFTS IN DEMAND AND SUPPLY3 Marks
Question
How is new equilibrium struck when supply or demand curve tends to shift?
✓

Answer

When supply or demand curve tends to shift, new equilibrium is struck through the process of extension and contraction of demand and supply. Generally, a change in demand or supply (implying increase or decrease in demand or supply) will lead to excess demand or excess supply. In a situation of excess demand ( $D >$ S), price will tend to rise causing (i) contraction of demand, and (ii) extension of supply. The process of contraction of demand and extension of supply would continue till new equilibrium is struck where demand $=$ supply. Likewise, in a situation of excess supply ( $S > D$ ), price will tend to fall causing (i) extension of demand, and (ii) contraction of supply. The process of extension of demand and contraction of supply would continue till new equilibrium is struck where demand $=$ supply

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 "3 Marks Question" from MICROECONOMICS CH : 13 MARKET EQUILIBRIUM UNDER PERFECT COMPETITION AND EFFECTS OF SHIFTS IN DEMAND AND SUPPLY→MICROECONOMICS CH : 13 MARKET EQUILIBRIUM UNDER PERFECT COMPETITION AND EFFECTS OF SHIFTS IN DEMAND AND SUPPLY — all question types→Economics STD 11 Commerce question papers→CBSE Board STD 11 Commerce question papers→CBSE Board question paper generator→

Similar questions

How would you select a base year if a normal period is not available?
→
What does a simple economy mean?
→
A statistical table has been prepared by Aryan which gives the birth rate and death rate of different states. The data given in the table has been collected from the published report of Census of India. Is the data contained in the table primary or secondary? Substantiate your answer by given reasons.
→
Which average would be suitable in the following cases?
Average size of readymade garments.
→
→
The marks obtained by 25 students in a class are as follows:
22, 28, 30, 32, 35, 37, 40, 41, 43, 44, 45, 45, 48, 49, 52, 53, 54, 56, 56, 58, 60, 62, 65, 68, 69
  1. Arrange the above data in the form of a frequency distribution taking class interval.
20-29, 30-39, 40-49, 50-59, 60-69
  1. Form the less than cumulative frequency distribution also.
→
Why should diamonds be priced so high and water be priced so low even when water is essential to sustain life while diamonds are not ?
→
A consumer buys $18$ units of a good at a price of $₹.9$ per unit. The price elasticity of demand for the good is $(-) 1.$ How many units the consumer will buy at a price of $₹.10$ per unit? Calculate.
→
Draw three hypothetical scatter diagrams showing the following value of 'r':
  1. r=-1.
  2. r = + 1.
  3. r=0.
→
“Algebraic signs are not taken into consideration in computing mean deviation.” Explain.
→