Question no 1777 SSC CGL Tier 1 Genral Awareness Questions and Answers Free Online Mock Test 41

SSC CGL Tier 1 :: GA Test 41

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1 .

The equilibrium price of a commodity will definitely rise if there is a/an :

[ A ] increase in both demand and supply
[ B ] increase in demand accompanied by a decrease in supply.
[ C ] increase in supply combined with a decrease in demand.
[ D ] decrease in both demand and supply.

Answer : Option B

Explanation :

An equilibrium market price is the price at which there is no tendencyfor it to change. When pric e is lowe r t han the equilibrium price, quantity demanded will be greater than quantity supplied. There will be tendency for the price to increase when price is higher than the equilibrium price, quantity supplied wi l l be greater than quanti ty demanded. There will be a tendency for the price to decrease. Equilibrium market price is attained when the quantity demanded equals quantity supplied, it is sometimes called market clearing price

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