Micro

Forms of Market

Medium

In a particular country, there was a severe heatwave. Arrange the following in the sequence of order in context of the market of ice-creams.

(A) Rise in the price of ice cream.

(B) Supply will remain the same.

(C) Competition among the buyers of ice cream inceaseees.

(D) The demand for ice cream increases.

Choose the correct answer from the options given below:

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

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

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

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

✅ Correct Option: 2

Option 1 -> Incorrect sequence; price rise cannot occur before demand increases.

Option 2 -> Correct sequence following economic causation: demand increases due to heatwave, supply stays constant in short run, buyers compete for limited supply, leading to price rise.

Option 3 -> Incorrect; supply remaining same cannot be the first event triggered by heatwave.

Option 4 -> Incorrect; competition cannot occur before demand increases.

Hence, Option 2: (D), (B), (C), (A) -> During a heatwave, the demand for ice cream increases first (D). In the short run, producers cannot immediately increase supply, so supply remains constant (B). With higher demand and limited supply, competition among buyers intensifies (C). This increased competition and demand-supply gap ultimately causes the price of ice cream to rise (A). This follows the basic economic principle of demand-supply dynamics. -> correct

2025: 29 May Shift 2

In a perfectly competitive market choose the correct statement from the following.

(A) Equilibrium occurs where market demand equals market supply.

(B) Each firm employs labour upto the point where the marginal revenue of labour equals the wage rate.

(D) Equilibrium price is always equal to minimum average cost of the firms.

Choose the correct answer from the options given below:

2025: 16 May Shift 1

Suppose the Income of consumers in a market increase. How will this effect the equilibrium price of the commodity, assuming that it is a normal good?

(A) There is excess demand at the existing price.

(B) Rising price leads to contraction in demand and expansion in supply and a new equilibrium price is attained, which is higher than the initial price.

(D) There is upward pressure on the price and price starts rising.

Choose the correct answer from the options given below:

2025: 16 May Shift 1

Identify the correct sequence due to which firms under perfect competition earn normal profits in the long run.

(A) The firms are earning less than normal profit at the prevailing price.

(B) The profits of each firm will increase to the level of normal profit.

(D) Some firms will exit, which will lead to an increase in price.

Choose the correct answer from the options given below:

2025: 22 May Shift 1

Perfect information implies that all buyers and all sellers are completely informed about the price, quality and other relevant details about the product, as well as the market. These features result in the single most distinguishing characteristic of perfect competition, that is...

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..............

2025: 3 June Shift 1

In the context of perfect competition, which one of the following is not correct?

Solution

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