Microeconomics Class 12: Sandeep Garg Chapter 11 Solutions

The Simple Application of Price Determination in Microeconomics

Using the latest edition of Sandeep Garg Microeconomics Class 12 textbook solutions, here are the expert Economics teachers' explanations of Chapter 11 Price Determination with Simple Applications. Students can benefit from Vedantu's Sandeep Garg Economics Class 12 Solutions by gaining comprehensive insight into the subject.

The insights that these insights provide are invaluable to students while they are completing their homework or studying for their exams. Economics contains numerous concepts; however, we at Coolgyan's provide students with simple applications of Price Determination which will be helpful to the students to get high marks during the board examinations. In the subjects of Commerce, Economics: Macroeconomics, Sandeep Garg's Macroeconomics Class 12 has been regarded as one of the most popular books. Economic solutions are planned and written for Sandeep Garg by specialists. The solutions provided by Vedantu are designed just for your convenience, to help you do well in your exams.

Commerce stream students study economics as a major subject. The subject has high test scores and opens the way to career paths in other similar areas such as ICWAI, CS, and CMA. Those wishing to enroll in these courses will need to score very good marks.

What to Study in Sandeep Garg Class 12 Solutions Price Determination with Simple Applications Chapter?

In the previous chapter, you have read about different types of markets which operate in an economy. The method of determining market prices is not the same for all. It varies from one market to another, depending on various factors. Here are some notable topics you must know to understand price determination and its application in the economy:

• Market Equilibrium: Answer to the very first question in Class 12 Sandeep Garg solution chapter 11 Price Determination with Simple Applications talks about Market equilibrium. When the total supply of goods or service in the market matches its total demand, it is called Market Equilibrium.

In a market with government regulation, there will be surpluses and shortages.  Prices will be capped, resulting in a shortage. Surpluses are caused by floor prices.

Minimum price: a legally imposed minimum on the market. The price cannot be lowered below this point.

Market equilibrium prices were set above the floor price, which policy makers considered to be too low.

The most common markets with price floors are those that are important sources of income for sellers, such as labor markets.

Minimum wage is an example of a price floor. A price ceiling on the other hand is a legally mandated maximum price. Buying or selling anything above this limit is prohibited.

Market equilibrium price, which the policy makers believed was too high, was below the ceiling price set by policy makers. Rent control creates shortages on the market through price controls. The idea of price controls is to keep stuff affordable for poor people.

Prices and Quantities at Equilibrium Change as Follows:

Demand and supply are intertwined to produce an equilibrium price and quantity. In the event of either supply or demand changing, or both, the equilibrium price or quantity will change accordingly. The chance of supply and demand changing perfectly so that equilibrium remains constant is very unlikely.

Ceteris Paribus: The assumption used in this example is that everything will be appropriate.

Whenever there is a Florida exporter willing to sell oranges in Asia, the demand for Florida oranges increases. As the demand increases, the supply will decrease, which increases the equilibrium price and equilibrium quantity.        

1) If there exists an importer who is willing to bring oranges from Mexico to Florida, that will increase the supply of oranges in Florida. In order to create a surplus, the supply must increase, thereby lowering equilibrium prices and increasing equilibrium quantities.              

In the event that an exporter and an importer both enter Florida's orange market together, what will happen to the prices? The equilibrium quantity will likely increase as the two companies enter the market at the same time. In contrast, importers and exporters will affect the price in opposite directions. Unless more details are provided, it is impossible to determine the change in equilibrium price. You should include detailed information on the amount of business the exporter and importer conduct. When we compare the quantity of imports and exports, we can determine who has a bigger impact on the market.

• Viable Industry: Viable industry is an industry which manages to supply the required quantity demanded in a market without resulting in excess supply. Market equilibrium is achieved in this case as well.

• Non-Viable Industry: Non-viable industries are industries which can never attain market equilibrium. Here, the demand and supply curve never intersect each other. In class 12 Sandeep Garg solution chapter 11 Price Determination with Simple Applications, both viable as well as non-viable industry has been explained with adequate illustration.

• Equilibrium Price: Equilibrium price is where the consumer's demand matches the seller's supply. Here, the amount demanded by consumers is equal to the amount producers are willing to sell.

• Equilibrium Quantity: At an equilibrium price, the amount or the quantity demanded and supplied by two parties is called equilibrium quantity. Equilibrium quantity is bound to change in accordance with the equilibrium price.

• Price Ceiling: Price ceiling comes into play when the price charged for a product/service is greater or lesser than the equilibrium price. In such a situation, the Government comes ahead and fixes a maximum price ceiling to keep the cost under control. The motive behind a price ceiling is to assure the affordability of products. 

• Relationship Between Demand and Supply: Demand and supply are interrelated. The relationship between these two factors determines market conditions, prices, and several other factors. Any change in supply would affect demand for a product, and vice versa. To understand the demand-supply relationship better, you can read Sandeep Garg class 12 solutions Price Determination with Simple Applications chapter.

How to Prepare Your Microeconomics Lessons for Exams?

Follow the provided steps to score better in the microeconomics section:

• Go through the explanations, examples, definitions, and diagrams properly so that you have the fundamentals clear.

• Try not to skip any sections. This is because the chapters are interconnected and skipping any part will make understanding difficult afterwards.

• Revise Sandeep Garg Microeconomics Solutions alongside your textbook chapters. Doing it simultaneously would help you understand the chapters better.

• Solve the questions and problems by yourself after referring to the solutions.

A well-strategized study plan would help you score better in your board exams. You could also download class 12 Sandeep Garg chapter 11 PDF so that you can access it and study whenever you need to.