Micro

Forms of Market

Medium

Arrange the following steps of Market Equilibrium under perfect competition in the correct order.

(A) Excess of market demand over market supply will cause excess demand situation.

(B) Quantity demanded will fall and quantity supplied will rise.

(C) The market will move towards the point where the quantity that the firm wants to sell is equal to the quantity that the consumer wants to buy.

(D) The market price would tend to increase, due to competition among buyers.

Choose the correct answer from the options given below:

(A), (B), (C), (D)

(A), (C), (B), (D)

(A), (D), (B), (C)

(C), (B), (D), (A)

✅ Correct Option: 3

Option 1 -> Starts with excess demand but doesn't follow with price increase mechanism.

Option 2 -> Incorrectly places equilibrium before quantity adjustments occur.

Option 3 -> Correctly sequences: excess demand → price increase due to competition → quantity adjustments → equilibrium achieved.

Option 4 -> Reverses the entire adjustment process by starting with equilibrium.

Hence, Option 3: (A), (D), (B), (C) -> The correct sequence of market equilibrium adjustment is: First, excess demand occurs when market demand exceeds supply (A). This triggers competition among buyers who bid up prices (D). As prices rise, the law of demand causes quantity demanded to fall while the law of supply causes quantity supplied to rise (B). Finally, these adjustments continue until the market reaches equilibrium where quantity demanded equals quantity supplied (C). This represents the self-correcting mechanism of perfect competition. -> correct

2026: 6 June Shift 1

Suppose the unit tax imposed by the government is Rs 2. If the firm produces and sells 10 units of goods, the total tax that the firm must pay to the government is Rs..............

2026: 19 May Shift 2

Identify the correct statement regarding the supply of a given commodity.

2026: 13 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Total Revenue (TR)	(I) TR /quantity (q)
(B) Average Revenue (AR)	(II) ΔTR/Δq
(C) Marginal Revenue (MR)	(III) TR-TC
(D) Profit (π)	(IV) price × quantity

Choose the correct answer from the options given below:

2025: 28 May Shift 2

When Government fix the minimum price of any commodity this move of government is known by:

2025: 28 May Shift 1

What would be the equilibrium number of firms in a market of identical firms, when market demand function $(Q_d)$ , supply function of a single firm $(Q_s1)$ and equilibrium price (P) are given as

$Q_d = 180 - 2P$

$Q_{s1} = 15 + P$

$P = 15$

2025: 30 May Shift 1

Arrange the stages of price determination in a perfect competition market:

(A) Estimate the market demand and supply.

(B) Firms adjust production to maximize profit.

(D) Short-run profit attracts new firms.

Choose the correct answer from the options given below:

Solution

Related questions:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)