P P1 E1 E 6 50 10 O The above schedule shows market M1 demand and market supply of th ecommodity at different prices.At the Mkt.D&Sup.X price of 7 and 6 the market demand is greater than market supply.This is the When supply increases more than situation of excess demand.There will be Demand falls from OP to OP1 and quantity competition among the buyers resulting in demand increases from OM to OM1. Decrease in a rise in price.Rise in price will result in price is less than increase in quantity. fall in market demand and rise in market iii)When demand and supply increasese equally supply.This reduces the excess then equilibriumprice remain same. demand.These changes continue till the price rises to Rs.8 at which excess demand is zero. The excess demand D D1 S S1 results in a rise in price of thecommodity. P E1 E D X O Q Q1 MktD&Sup When increase in demand is equal to increase in supply price remains unchanged a tOP.Quantity exchanged increases from OQto OQ1. Market for a good is in With the help of demand and supply equilibrium.There is increase in schedule explain th emeaning of excess demand for the goods.Explain the demand and its effects on price ofa chain effect of this change. commodity. Ans:- Y Ans:- Demand and supply D1 schedule kg.) kg.) D 10 10 50 9 20 40 S 8 30 30 7 40 20 P1
P P1 E1 E O M1 Mkt.D&Sup.X When supply increases more than Demand falls from OP to OP1 and quantity demand increases from OM to OM1. Decrease in price is less than increase in quantity. iii)When demand and supply increasese equally then equilibriumprice remain same. D D1 S S1 P E1 E D X O Q Q1 MktD&Sup When increase in demand is equal to increase in supply price remains unchanged a tOP.Quantity exchanged increases from OQto OQ1. With the help of demand and supply schedule explain th emeaning of excess demand and its effects on price ofa commodity. Ans:- Demand and supply schedule kg.) kg.) 10 10 50 9 20 40 8 30 30 7 40 20 6 50 10 The above schedule shows market demand and market supply of th ecommodity at different prices.At the price of 7 and 6 the market demand is greater than market supply.This is the situation of excess demand.There will be competition among the buyers resulting in a rise in price.Rise in price will result in fall in market demand and rise in market supply.This reduces the excess demand.These changes continue till the price rises to Rs.8 at which excess demand is zero. The excess demand results in a rise in price of thecommodity. Market for a good is in equilibrium.There is increase in demand for the goods.Explain the chain effect of this change. Ans:- Y D1 D S P1
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