CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes


CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination : CBSE academics unit is formed with training, academic, Innovation and research unit of CBSE and it looks after some important fields to maintain its standard of education. This unit incorporates different policies and also monitors their operational activities to achieve academic excellence in all aspects. CBSE provides balanced academic structure and equal educational pattern to all its affiliated schools. The schemes of studies, academic guidelines and text materials are supervised by this unit in accordance with the acts and policies approved by the Government of India.

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination : Here we provide CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete notes. We gave here direct Download Links for CBSE Class 12 Commerce Economics Forms Of Market And Price Determination.

Download here CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes In PDF Format. 

Preparing for XI & XII Commerce? - Must read below
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better. Watch demo videos below -

Read this article to learn about the most frequently asked questions on Form of Market and Price Determination.

Q.1. What is meant by market in economics?

Ans. In economics, market refers to the entire area in which buyers and sellers of a commodity are in close contact with each other for purchase and sale of that commodity.

Q.2. In which market form are there no close substitutes of the product?

Ans. Monopoly.

Q.3. In which market form is there a single seller?

Ans. Monopoly.

Q.4. Define monopoly.

Ans. Monopoly is a market condition in which there is a single seller/producer of a product having no close substitutes.

Q.5. Define Oligopoly.

Ans. A form of imperfect competition in which a small number of big firms produce majority of the total output of the industry and are mutually dependent for taking price and output decisions.

Q.6. Under which market form, a firm is a price-taker?

Ans. Perfect competition.

Q.7. When is a firm called ‘price taker?

Ans. The firm is called price taker when it has to adopt the price determined by market demand and market supply.

Q.8. What is a price taker firm?

Ans. A price taker firm is a firm which has no option but to sell at a price determined at the industry level.

Q.9. When is a firm called ‘price maker’?

Ans. When the firm can influence the market price of the product that the firm is producing.

Q.10. What is a price maker firm?

Ans. A price maker firm is one which can influence the market price of the product on its own.

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination : 

Q.11. In which market form are the products homogeneous?

Ans. Perfect competition.

Q.12. In which market form demand curve of a firm is perfectly elastic?

Ans. Perfect competition.

Q.13. In which market form can a firm not influence the price of the product?

Ans. Perfect competition.

Q.14. Under which market form a firm’s marginal revenue is always equal to price?

Ans. Perfect competition.

Q.15. In which market form are the average and marginal revenue of a firm always equal?

Ans. Perfect competition.

Q.16. What is a cartel?

Ans. A group of large number of firms which explicitly and openly agree to work together is called a cartel.

Q.17. How many firms are there in a monopoly market?

Ans. There is a single seller in a monopoly market.

Q.18. In which market form are products differentiated?

Ans. Monopolistic competition.

Q.19. What can you say about the number of buyers and sellers under monopolistic competition?

Ans. In this market form, there are a large number of buyers and sellers.

Q.20. State one feature of oligopoly.

Ans. (1) Few firms.

(2) Firms are interdependent in taking price and output decisions.

(3) Barriers to the entry of firms

(4) Non-Price competition.

Q.21. Draw average revenue curve of a firm under perfect competition.

OR

Draw demand curve of a firm under perfect competition.

Ans.

http://cdn.economicsdiscussion.net/wp-content/uploads/2015/11/clip_image00284.jpg

Q.22. In which market form, are there restrictions on the entry of new firms?

Ans. Monopoly.

Q. 23.Define patent rights.

Ans. The owners of patent rights have exclusive rights for a production process to the extent no one else can use that technology without a hence or permission from them.

Q.24.Define persuasive advertising.

Ans. In persuasive advertising, attempt is made to persuade a consumer to buy products of the firm.

Q.25. State one characteristic of a perfectly competitive market.

Ans. Large number of buyers and sellers.

Q.26. Name the characteristic which makes monopolistic competition different from perfect competition.

Ans. Firms produce differentiated products.

Q. 27.What are selling costs?

Ans. Costs incurred on promoting the demand for a product are known as selling costs.

Q.28. What is meant by super normal profit?

Ans. Profit earned in excess of normal profit is called super normal profit.

Q.29. What is meant by normal profit?

Ans. Normal profit is the minimum profit which a firm must earn to continue to remain in business.

Q.30. What is patent life?

Ans. The number of years for which patents are valid is called patent life

Q.31. What is information advertising?

Ans. Information advertising is used to inform the consumers about new products, prices, quality etc.

Q.32. What is equilibrium price?

Ans. Equilibrium price is that price at which quantity demanded and quantity supplied of a commodity are equal.

Q.33. What is meant by equilibrium quantity?

Ans. The quantity of a commodity bought or sold at the equilibrium price, is called equilibrium quantity.

Q.34. What is market equilibrium.

Ans. The situation where market demand equals market supply and determines an equilibrium price is known as market equilibrium.

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination : 

Q.35. What happens to equilibrium price of a good when the demand for that good increases?

Ans. In case of increase in demand, the equilibrium price will also increase.

Q.36. What happens to the equilibrium price when supply of a good increases?

Ans. The equilibrium price will decrease if the supply of a good increases.

Q.37. When will an increase in demand result in an increase in price but no change in quantity?

Ans. If supply of a commodity is perfectly inelastic, increase in demand will result in an increase in price only, the equilibrium quantity will remain unchanged.

Q.38. When will an increase in demand imply an increase in quantity demanded but no change in price?

Ans. If supply curve of a commodity is perfectly elastic, an increase in demand will increase the quantity demanded only there will be no effect on equilibrium price of the commodity.

Q.39. When will an increase in supply lead to a decrease in price only, but no change in quantity?

Ans. An increase in supply will lead to a decrease in equilibrium price only when demand for the commodity is perfectly inelastic.

Q.40. At what price, higher or lower than the equilibrium price, will there be excess demand?

Ans. Excess demand always exists when the price is lower than the equilibrium price.

Q.41. When will an increase in supply not affect the equilibrium price?

Ans. An increase in supply will not affect the equilibrium price when demand of the commodity is perfectly elastic.

Q.42. If the demand of a commodity decreases but supply remains constant, what will be the effect on price and quantity?

Ans. Equilibrium price as well as quantity bought and sold will fall in case of decrease in demand with supply remaining constant.

Q.43. Give the meaning of excess demand of a product.

Ans. When demand for a commodity is greater than its supply at a given price, it is known as excess demand.

Q.44. Give meaning of excess supply of a product.

Ans. When supply of a commodity is more than its demand at a given price, it is known as excess supply.

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination : 

Q.45. What happens if the market price is more than equilibrium price?

Ans. If market price is more than the equilibrium price there will be excess supply of the commodity and competition among sellers will bring down the market price to the equilibrium price.

Q.46. What is the condition for determination of equilibrium price?

Ans. Equality of quantity demanded and quantity supplied is the condition for determination of equilibrium price.

Q.47. What happens when government fixes the price of any commodity below the equilibrium price?

Ans. When the government fixes the price of any commodity at lower level than its equilibrium price, the excess demand leads to black marketing i.e. goods are illegally sold at higher price than the price fixed by the government.

Q.48. What is the aim of price control policy of the government?

Ans. The aim of price control is to keep the market price below the equilibrium price to protect the interest of the consumers.

Q.49. How does an increase in input price for a product affect its equilibrium quantity exchanged in a market?

Ans. Increase in input price will increase the cost of production and decrease the supply of the commodity, which will lead to decrease in the quantity exchanged.

Q.50. How does a favourable change in taste affect the equilibrium quantity exchanged in the market?

Ans. A favourable change in taste will increase the demand for a commodity & thus it will lead to increase in equilibrium price and quantity exchanged.

Q.51. How does an increase in the price of a substitute good affect the equilibrium price?

Ans. Increase in prices of substitute of a commodity will increase the demand increase the equilibrium price of the commodity.

Q.52. How does technological progress affect the market price and quantity exchanged?

Ans. An advanced technology will cause marginal cost to fall which will further increase the supply that will shift supply curve towards right and cause equilibrium price to fall and equilibrium quantity to rise.

Q.53. How does an increase in excise tax rate affect the market price and quantity exchanged?

Ans. An increase in excise tax rate will reduce the quantity supplied that will increase the price of the commodity.

Q.54. What IS the relationship between maximum control price and the equilibrium price?

Ans. Maximum control price is always lower than the equilibrium price.

Q.55. What is the relationship between minimum support price and equilibrium?

Ans. Minimum Support price is always fixed at higher level than the equilibrium price.

Q.56. Can the equilibrium price change?

Ans. Yes, the equilibrium price of a commodity can change when there is a change in demand and/or supply.

Q.57. What is the minimum acceptable price to a producer?

Ans. The minimum acceptable price to a producer is equal to marginal cost of production.

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination : 

Q. 58. “If demand and supply both increase, equilibrium price will remain same”. Do you agree with the statement?

Ans. No, depending upon the proportion of increase in demand and supply, equilibrium price may increase, decrease or remain constant.

Example:

Ans. When increase in demand is more than increase in supply equilibrium price will rise.

When increase in demand is less than increase in supply, equilibrium price will fall.

When increase in demand is equal to increase in supply, equilibrium price will remain unchanged.

Q.59. What will happen to equilibrium price when demand is perfectly elastic and supply increases?

Ans. The equilibrium price will not be affected if demand is perfectly elastic and supply increases.

Q.60. What is the maximum price a consumer will be willing to pay for a commodity?

Ans. The maximum price a consumer will be willing to pay for a commodity is equal to the marginal utility of that commodity.

CBSE Class 12 Commerce Economics Forms Of Market And Price Determination Complete Notes

Cakart.in provides India’s top Class 12 Commerce  faculty video classes – online & in Pen Drive/ DVD – at very cost effective rates. Get Class 12 Commerce  Video classes from www.cakart.in  to do a great preparation for primary Student.

Watch Class 12 Commerce  sample video lectures Here
Watch Class 12 Commerce  sample lecture books  Here
Watch Class 12 Commerce   free downloads  Here

Preparing for XI & XII Commerce? - Must read below
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better. Watch demo videos below -

Leave a comment

Your email address will not be published. Required fields are marked *

SHARE