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Que : 59. Explain the market equilibrium price,
Answer:

Both market demand and market supply acts as a counteracting forces, which move in the opposite direction. Market equilibrium is determined when the quantity supplied. The price determined corresponding to market equilibrium is known as equilibrium price and the corresponding quantity is known as equilibrium quantity.

Price of commodity

Market demand

Market supply

Shortage or surplus

Remarks

2

100

20

(-)80

excess demand

4

80

40

(-)40

excess demand

6

60

60

0

equilibrium

8

40

80

40

excess supply

10

20

100

80

excess supply