Economics 1 Marks Question

Market price of wheat will increase (due to decrease in supply).

Equilibrium price is the price at which market demand equals market supply.

Equilibrium is a situation where at a given price, quantity demanded is equal to quantity supplied. There is no tendency for market to change from this situation

It is known as duopoly. It is a special case of oligopoly.

It is homogeneous.

There are various barriers to the entry of the new firms.

Support price is higher than the equilibrium price.

It is a market in which there is only one seller/ producer of a product.

Equilibrium price is the price at which quantity demanded of a commodity is equal to its quantity supplied.

When supply decreases, equilibrium price will increase, other things remaining constant.

It will remain constant.

Supply means the quantity of a good which a firm (or industry) is willing to supply at a given price during a period of time.

For a non-viable industry, supply curve lies above the demand curve.

Control price is lower than the equilibrium price.

Under perfect competition, a firm's Marginal Revenue is always equal to price.

Monopoly demand curve is a downward sloping curve, showing that more can be sold only at a lower price.

The quantity bought and sold att he equilibrium price is called equilibrium quantity.

Costs incurred by a firm with a view to promote sales through publicity are seiling costs.

Market equilibrium refers to the situation when market demand is equal to the market supply.

It indicates increase in demand at the same price.

Equilibrium quantity is the quantity at which quantity demanded and quantities supplied of a commodity are equal.

When the market price is lower than the equilibrium price there will be excess demand.

Excess supply means market supply of a commodity is more than the market demand for a commodity at a given price.

It decreases the price of the commodity.

In monopoly, MR curve slopes downward and it lies below the AR curve.

Price is determined by the forces of market demand and market supply under perfect competition.

Equilibrium price will rise.

Equilibrium price will fall.

When supply is perfectly inelastic with increase in demand, price increases but there is no change in quantity supplied.

When Market price is below the equilibrium price, then at that given price, demand is greater than supply that leads to excess demand.

Other things remaining constant, when demand and supply both increase in equal proportion, there will be no change in equilibrium price. However, the equilibrium quantity will increase.

The price at which equilibrium is reached is called equilibrium price.

Selling the same good at different prices to different buyers is known as price discrimination.

It refers to a market form where all the firms in the market are producing homogeneous product. There is no difference of any kind.

In a situation of increase in demand, other things remaining constant, equilibrium price must be rising.

Imperfect oligopoly is that market situation in which all firms produce differentiated but close substitutes, e.g. automobile industry.

When demand increases less than the supply, equilibrium price will fall, other things remaining constant.

These are the costs incurred by the firm with a view to promote sales through publicity.

Equilibrium point is the point of intersection of the demand curve and supply of commodity.

With increase in input price, the supply curve shifts to the left. Accordingly, equilibrium quantity reduces in the product market.

When demand decreases, equilibrium price must decrease, other things remaining unchanged.

Monopoly (Single seller as producer).

Main features of monopoly market are as follows:

1. Single seller and large number of buyers of a product.
2. Entry of new firms not possible.
3. No close substitutes of the product.
4. Full control over price.
5. Price discrimination.
6. Supernormal profits even in the long-run.
7. Less output and higher price as compared to perfect competition.

When supply increases, equilibrium price will fall, other things being equal.

If at a prevailing price, quantity demanded is more than quantity supplied, then supplier will be motivated to increase the price of the commodity due to which demand decreases, till it reaches at the equilibrium price where quantity demanded is equal to quantity supplied.

Perfect competition is a form of the market where there are a large number of buyers and sellers of the commodity. Homogeneous product is sold at a uniform price.

Two examples of price floor in India are:

1. Agricultural Price Support Programmes, i.e., fixing minimum support price for agricultural goods and
2. Minimum Wage Regulation, i.e., fixing minimum wages for labourers.

Price ceiling means maximum price of a commodity that the sellers can charge from the buyers. Often the government fixes this price much below the equilibrium market price of the commodity, so that, it ecomes within the reach of the poorer sections of the society.

When the government imposes price floor, it results in more supply and less demand thus causing a surplus of the commodity.