CBSE 12 Introductory Microeconomics | 5. Market Equilibrium by Pavan | Learn Smarter
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5. Market Equilibrium

Market equilibrium is achieved when the quantity demanded by consumers equals the quantity supplied by firms, resulting in a stable price and quantity in the market. Understanding the behavior of supply and demand helps in analyzing market shifts, which affect equilibrium price and quantity. The influence of government interventions, like price ceilings and floors, further illustrates the complexities of maintaining market balance.

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Sections

  • 5

    Market Equilibrium

    This section explores the concept of market equilibrium, where the quantity supplied equals the quantity demanded, leading to a stable market price.

    Learning Practice

  • 5.1

    Equilibrium, Excess Demand, Excess Supply

    This section covers market equilibrium in perfectly competitive markets, focusing on the concepts of excess demand and excess supply.

    Learning Practice

  • 5.1.1

    Market Equilibrium: Fixed Number Of Firms

    This section discusses market equilibrium in a perfectly competitive market with a fixed number of firms, elucidating how demand and supply curves determine the equilibrium price and quantity.

    Learning Practice

  • 5.1.2

    Market Equilibrium: Free Entry And Exit

    This section examines market equilibrium under the assumption of free entry and exit of firms, leading to a situation where firms earn normal profit.

    Learning Practice

  • 5.2

    Applications

    This section examines the applications of supply-demand analysis, particularly focusing on government intervention through price ceilings and price floors.

    Learning Practice

  • 5.2.1

    Price Ceiling

    This section explores the concept of price ceilings, examining their purpose and implications on market equilibrium, particularly in the context of essential commodities.

    Learning Practice

  • 5.2.2

    Price Floor

    This section discusses the concept of price floors, government-imposed minimum prices for goods, which lead to excess supply in the market.

    Learning Practice

References

NCERT Study Material

Class Notes

Memorization

What we have learnt

  • Equilibrium occurs at the i...
  • Shifts in demand or supply ...
  • Government interventions li...

Final Test

Revision Tests