Market Mechanism
Introduction
- Chapter 6: Market Mechanism
- Assurance to upload video on the occasion of Ganesh Chaturthi
- Fateh Course: Preparation for Boards and Entrance Examinations
- Spartan Course: Preparation only for Boards
- Special Offer: 35% discount on Ganesh Chaturthi
Equilibrium
- Equilibrium: When demand and supply intersect each other
- Equilibrium Price: The price where demand and supply are equal
- Equilibrium Quantity: The quantity where demand and supply are equal
- Free notes available for download
Perspectives of Demand and Supply
Demand Side
- Demand is generated by buyers because the commodity provides utility
- The consumer is ready to pay the price if they receive utility
Supply Side
- Supply is provided by producers
- Producers aim to maximize profit
- It is possible to earn more profit by increasing price
Market Position and Price Determination
- Equilibrium Position: Where demand and supply are equal
- Excess Supply: Supply is more and demand is less
- Excess Demand: Demand is more and supply is less
- Price is reduced or increased depending on the situation
Diagram
- Price and quantity determination through a diagram
- Excess supply and excess demand explained through a diagram
Stable Equilibrium
- Stable Equilibrium: Re-established even with a small disturbance
- Importance of stable equilibrium in board exams
Case Studies
- Impact of demand and supply changes through various case studies
- Explanation of 18 different cases
Price Ceiling
- Maximum Price Legislation: Maximum price limit set by the government
- Generally applicable to essential goods
- Diagram of price ceiling and its impact
Price Floor
- Minimum Price Legislation: Minimum price limit set by the government
- Generally applicable to agricultural products
- Diagram of minimum support price and its impact
Conclusion
- In-depth study of market mechanism is necessary
- Deep understanding of the subject matter through diagrams and case studies
These notes will help you comprehensively understand the key points of the market mechanism and assist in preparing for the board exams.