GENERAL KNOWLEDGE

Detailed explanation-1: -Stickiness refers to the tendency of certain prices to resist movement, even in changing market conditions.

Detailed explanation-2: -The tendency of the market to move towards the equilibrium is known as market mechanism. The balance thus formed between supply and demand is termed as market equilibrium. The demand curve is usually downward sloping. This shows that consumer tends to purchase more when the prices of a commodity are less.

Detailed explanation-3: -A market is in equilibrium if at the market price the quantity demanded is equal to the quantity supplied. The price at which the quantity demanded is equal to the quantity supplied is called the equilibrium price or market clearing price, and the corresponding quantity is the equilibrium quantity.

Detailed explanation-4: -The market-clearing price is the price at which the quantity supplied equals the quantity demanded. This price is the only one that balances, or “clears, ‘’ the market. Market competition tends to move prices toward market-clearing levels.