Question

Question 5 If a market is in equilibrium, then all demanders receive the goods they want, and all suppliers sell the goods they want O demand curves and supply curves are the same at the equilibrium price, quantity demanded is equal to quantity supplied Question 6 If excess demand exists in a market, then the quantity demanded is higher than the quantity supplied and price falls the quantity demanded is higher than the quantity supplied and price rises the quantity demanded is less than the quantity supplied and price rises the quantity demanded is less than the quantity supplied and price falls

Answer 1

Question 5. The market equilibrium is defined as a point where the quantity demanded is equal to quantity supplied.

Therefore, Option (C) is correct and the rest all are incorrect.

Question 6. The excess demand is defined as when the quantity demanded is more than the quantity supplied, that is, below the equilibrium price. Thus, competition among the buyers increase the prices and clears excess demand and equilibrium is attained.

Therefore, Option (B) is correct and the rest all are incorrect.

Question 7. The law of demand states that there is an inverse relationship between the quantity demanded and price, that is, an increase in the price of commodity lowers the quantity demanded.

Therefore, Option (C) is correct and the rest all are incorrect.

Question 8. It is given that pizza and hamburger are substitutes and there is a fall in the price of the pizza. Thus, one can substitute pizza for hamburgers, that is, the demand for hamburgers will fall. It will shift the demand curve of hamburgers to the left and it will decrease the equilibrium price and quantity for hamburgers.

Therefore, Option (D) is correct and the rest all are incorrect.