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Question
State with reasons whether you agree or disagree with the following statement.
Price under perfect competition is decided by the interaction between demand and supply.
Options
Agree
Disagree
MCQ
Short Note
Solution
I Agree with the given statement.
Reason:
In a market with perfect competition, the price of the good is determined by the interaction of supply and demand. This price is referred to as the equilibrium price. The forces of supply and demand must coexist in order to establish the market's equilibrium price.
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RELATED QUESTIONS
Observe the following table and answer the questions:
| Price of a banana (per dozen) in ₹ | Demand (in dozen) | Supply (in dozen) | Relation between DD and SS |
| 10 | 500 | 100 | DD > SS |
| 20 | 400 | _____ | DD > SS |
| 30 | _____ | 300 | DD = SS |
| 40 | 200 | _____ | DD < SS |
| 50 | ______ | 500 | DD < SS |
- Fill in the blanks in the above schedule.
- Derive the equilibrium price from the above schedule with the help of a suitable diagram.
Study the following diagram and answer the questions:
Questions:
- Prepare a hypothetical schedule for market demand and supply for the given market.
- State the equilibrium price and corresponding market demand and market supply for the given market.
