Market Equilibrium under Perfect Competition MCQ — Class 11

Market equilibrium

Market equilibrium: the market state where quantity demanded equals quantity supplied at a particular price

Equilibrium price

Equilibrium price: the price at which market demand equals market supply

Excess demand

Excess demand: a situation where quantity demanded exceeds quantity supplied at the prevailing price

Excess supply

Excess supply: a situation where quantity supplied exceeds quantity demanded at the prevailing price

Increase in demand effect

Increase in demand effect: with supply unchanged, a rightward demand shift raises both equilibrium price and equilibrium quantity

Decrease in demand effect

Decrease in demand effect: with supply unchanged, a leftward demand shift lowers both equilibrium price and equilibrium quantity

Increase in supply effect

Increase in supply effect: with demand unchanged, a rightward supply shift lowers equilibrium price and raises equilibrium quantity

Decrease in supply effect

Decrease in supply effect: with demand unchanged, a leftward supply shift raises equilibrium price and lowers equilibrium quantity

Price ceiling

Price ceiling: a legal maximum price set below equilibrium that can create excess demand or shortage

Price floor

Price floor: a legal minimum price set above equilibrium that can create excess supply

1. Which concept best matches this situation? At ₹50 both buyers and sellers plan 1,000 units.

1. Equilibrium price
2. Market equilibrium
3. Excess supply
4. Increase in supply effect

2. Which concept best matches this situation? At this price there is neither excess demand nor excess supply.

1. Excess demand
2. Increase in demand effect
3. Equilibrium price
4. Decrease in supply effect

3. Which concept best matches this situation? Consumers want 120 units but firms offer only 90.

1. Excess supply
2. Decrease in demand effect
3. Price ceiling
4. Excess demand