Market Equilibrium and Demand-Supply Analysis

What happens when market supply is greater than market demand?

• Excess demand exists

• Excess supply exists

• Equilibrium is reached

• Prices remain stable

What is the equilibrium price in the following

QD = 200 – p

Qs = 100 + p

• 50

• 25

• 45

• 100

What is the relationship between price and excess demand?

• Price rises when there is excess demand

• Price falls when there is excess demand

• Price remains unchanged

• Price is irrelevant to excess demand

What happens when there is excess demand in a market?

• Prices tend to fall

• Supply increases immediately

• Prices tend to rise

• The market closes down

What happens when price is below equilibrium?

• Excess supply occurs

• Excess demand occurs

• Nothing changes

• Supply increases

Which government intervention is used for agricultural goods?

• Maximum price limits

• Price floors

• Price ceiling

• Free market policy

What is used to implement price ceilings on necessary items?

• Auction system

• Fair price shops

• Online markets

• Private sellers

How does an increase in consumer income typically affect demand?

• Demand curve shifts leftward

• Demand stays the same

• Demand curve shifts rightward

• Demand disappears

In the below example, if p=40, what is the demand quantity?

QD = 200 - p

QS = 120 + p

• 200
• 160
• 140
• 180

What is a price floor?

• The lowest market price

• A government-imposed lower limit on price

• The average price of goods

• A temporary price reduction