ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The market establishes the prices for goods and other services. These rates are determined by supply and demand. Supply is created by the sellers, while demand is generated by buyers. Markets try to find some balance in price when supply and demand are themselves in balance.

Detailed explanation-2: -Market economies work using the forces of supply and demand to determine the appropriate prices and quantities for most goods and services in the economy.

Detailed explanation-3: -It’s a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged.

Detailed explanation-4: -Alfred Marshall In 1890, Alfred Marshall’s Principles of Economics developed a supply-and-demand curve that is still used to demonstrate the point at which the market is in equilibrium.

Detailed explanation-5: -The interaction of supply and demand determines a market equilibrium in which both buyers and sellers are price-takers, called a competitive equilibrium. Prices and quantities in competitive equilibrium change in response to supply and demand shocks.