Market EquilibriumClass 12 Introductory Microeconomics Assertion & Reason Questions

Assertion (A): In a perfectly competitive market, equilibrium is defined as a situation where the plans of all consumers and firms in the market match.

Reason (R): In equilibrium, the aggregate quantity that all firms wish to sell equals the quantity that all consumers wish to buy, meaning market supply equals market demand.

Assertion (A): If the prevailing market price is below the equilibrium price, a situation of excess demand exists.

Reason (R): A price ceiling is generally imposed on necessary items like wheat, rice, and sugar to make them affordable.

Assertion (A): A situation of excess supply in the market exerts downward pressure on the market price.

Reason (R): When there is excess supply, some firms are unable to sell their desired quantity and will lower their price to attract buyers.