ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Price is dependent on the interaction between demand and supply components of a market. Demand and supply represent the willingness of consumers and producers to engage in buying and selling.

Detailed explanation-2: -The quantity supplied depends on the price level, which can be set by market forces or a governing body by using price ceilings or floors.

Detailed explanation-3: -For many economists, those three magic words are “supply, demand, price.” In any market transaction between a seller and a buyer, the price of the good or service is determined by supply and demand in a market. Supply and demand are in turn determined by technology and the conditions under which people operate.

Detailed explanation-4: -The equilibrium price and quantity produced of most goods are determined in the market by the interaction of the forces of demand and supply. At the equilibrium price and quantity, the quantity demanded equals to the quantity supplied.