Class 9 new ncert Chapter 9 SST Solution - The Price Puzzle: What Drives the Market
Q & A — 6th 7th 8th 9th 10th
Important Question Answer
Question 1. What is demand? Explain the Law of Demand with an example.
Answer: Demand is the quantity of a good or service that consumers are willing and able to buy at a particular price.
The Law of Demand states that, keeping other factors constant, when the price of a product increases, its quantity demanded decreases. When the price decreases, its quantity demanded increases.
Example: If mangoes cost ₹150 per kg, Srivalli buys 1 kg. When the price falls to ₹100, she buys 2 kg, and when it falls to ₹50, she buys 3 kg.
Thus, price and quantity demanded have an inverse relationship.
Question 2. Why does the demand curve slope downward?
Answer: The demand curve slopes downward because price and quantity demanded have an inverse relationship. When the price falls, consumers generally buy more, and when the price rises, they buy less.
Question 3. What is supply? Explain the Law of Supply with an example.
Answer: Supply is the quantity of a product that sellers are willing and able to offer for sale at a particular price.
The Law of Supply states that, keeping other factors constant, when the price increases, the quantity supplied also increases. When the price decreases, the quantity supplied decreases.
Example: A seller supplies 1 kg of mangoes at ₹50, 2 kg at ₹100 and 3 kg at ₹150.
Thus, price and quantity supplied have a direct relationship.
Question 4. Why does the supply curve slope upward?
Answer: The supply curve slopes upward because higher prices generally increase the profitability of producers. Therefore, sellers are encouraged to supply more.
Question 5. Differentiate between substitute goods and complementary goods.
Answer:
| Substitute Goods | Complementary Goods |
|---|---|
| These goods can replace each other. | These goods are generally used together. |
| Examples: tea and coffee. | Examples: car and petrol. |
| If the price of one rises, demand for the other may increase. | If demand for one falls, demand for the other may also fall. |
| Example: mangoes and bananas. | Example: smartphone and earphones. |
Question 6. Explain the main determinants of demand.
Answer: Demand is affected by several factors apart from the price of the product. The main determinants are:
- Price of related goods: The price of substitutes and complementary goods affects demand.
- Income: Higher income generally allows people to buy more or better-quality goods.
- Taste and preferences: People demand more of the products they like.
- Population: The size and composition of the population affect demand.
- Diminishing marginal utility: Additional satisfaction from consuming more units generally decreases.
- Seasonality: Demand changes according to weather, seasons and festivals.
- Future price expectations: People may buy more now if they expect prices to rise or postpone purchases if they expect prices to fall.
Question 7. Explain the main determinants of supply.
Answer: The main factors affecting supply are:
- Price of related goods: Producers may produce the more profitable alternative.
- Number of sellers: More sellers generally increase market supply.
- Technology: Better technology can reduce production costs and increase production.
- Future expectations: Producers may increase or reduce production depending on expected future demand and prices.
- Input costs: Changes in the cost of inputs can affect the willingness to supply.
- Weather and other conditions: Weather, disasters and resource availability can affect production and supply.
Question 8. What is individual demand, demand schedule and market demand?
Answer: Individual demand is the quantity of a good or service that a particular consumer wants to buy at different prices, keeping other factors constant.
A demand schedule is a table that shows the quantity of a product demanded by a consumer at different prices.
Market demand is the total quantity of a product demanded by all consumers in the market at different prices.
Market Demand = Sum of all Individual Demands
Question 9. What is individual supply and market supply?
Answer: Individual supply is the quantity of a product that a particular seller offers for sale at different prices.
Market supply is the total quantity of a product supplied by all sellers in the market at different prices.
Market Supply = Sum of all Individual Supplies
Question 10. What is market equilibrium? Explain with an example.
Answer: Market equilibrium is the point where the quantity demanded equals the quantity supplied.
At equilibrium:
- There is no excess demand.
- There is no excess supply.
- There is no immediate pressure for the price to change.
Example:
At ₹100 per kg of mangoes:
- Quantity demanded = 12 kg
- Quantity supplied = 12 kg
Therefore:
Equilibrium Price = ₹100
Equilibrium Quantity = 12 kg
Thus, the market is in equilibrium because QD = QS.
Question 11. What happens when there is excess demand or excess supply?
Answer:
Excess Demand: When quantity demanded is greater than quantity supplied, there is a shortage of goods.
Demand > Supply → Prices tend to rise.
Example: At a low price, many people want to buy mangoes, but sellers offer only a small quantity.
Excess Supply: When quantity supplied is greater than quantity demanded, there is a surplus.
Supply > Demand → Prices tend to fall.
Example: If sellers have many mangoes but fewer people want to buy them, sellers may reduce prices to sell their stock.
Question 12. Why is market equilibrium not permanent in the real world?
Answer: Market equilibrium is not permanent because real-world markets are dynamic. Demand and supply keep changing due to:
- Changes in technology
- Income
- Weather
- Wages
- Interest rates
- Political events
- Wars
- Pandemics
- Natural disasters
- Changes in trends
Therefore, markets continuously adjust towards a new equilibrium.
Example: During COVID-19, demand for face masks increased sharply. Supply could not immediately meet demand, so prices increased. Later, producers increased supply and prices fell.
Question 13. How is equilibrium shown on a demand-supply graph?
Answer: Equilibrium is shown at the point where the demand curve and supply curve intersect (प्रतिच्छेद). This point represents the equilibrium price and equilibrium quantity.
Question 14. Explain price ceiling, price floor and monopoly.
Answer:
Price Ceiling –
A price ceiling is a maximum price that a seller can charge.
Example: The government may fix a maximum price for essential medicines to prevent overcharging.
Price Floor –
A price floor is a minimum price below which a price cannot be charged. For an effective price floor, it must be above the market equilibrium price.
Example: Minimum wage provides workers with a minimum level of payment.
Monopoly –
A monopoly is a market situation where a single seller or producer controls the entire supply of a unique product or service.
A monopoly may:
- Charge high prices
- Supply less
- Provide poorer quality
- Restrict supply
Therefore, the government may regulate monopolistic practices to protect consumer welfare.
Question 15. What is hoarding and black marketing?
Answer: Hoarding is the accumulation of goods beyond immediate needs, often because people expect shortages or higher prices in the future.
Black marketing is the illegal trade of goods and services that are banned or regulated.
Question 16. Why does the government intervene in markets?
Answer: The government intervenes in markets to protect consumers, workers and producers and to ensure fair outcomes.
Question 17. Explain the limitations of excessive government intervention.
Answer: Government intervention can be useful, but excessive intervention can also create problems.
1. Price distortions
If the government fixes prices below market levels, producers may earn less. This can reduce their motivation to produce and may cause shortages.
2. Compliance burdens
Too many licences, permits and regulations can increase the time and cost of running a business. This can especially affect small businesses.
3. Discourages innovation
Heavy regulations and price controls may reduce the incentive to invest in new technology and better production methods.
4. Discourages entrepreneurship
Excessive regulations can make it difficult for people to start or expand businesses.
Conclusion: The government should intervene when necessary to protect public welfare, but intervention should be carefully balanced so that it does not unnecessarily harm production, innovation and businesses.
टिप्पणियाँ
एक टिप्पणी भेजें