Date 29.5.2020
We now take a look at the simple applications of Tools of Demand and Supply.
There are two types of government inteventions
1.Price Ceiling: refers to fixing the maximum price of a commodity at a level lower than the equilibrium price.
Let us understand it by considering the commodity wheat and its price determination.
In the diagrm , demand curve DD and supply curve SS of wheat intersect each other at point E and as a result , Equilibrium price of OP is determined.
Suppose , the equilibrium price OP is very high and many poor people are unable to afford wheat at that Price .
2. PRICE FLOOR OR MINIMUM SUPPORT PRICE
We now take a look at the simple applications of Tools of Demand and Supply.
There are two types of government inteventions
1.Price Ceiling: refers to fixing the maximum price of a commodity at a level lower than the equilibrium price.
Let us understand it by considering the commodity wheat and its price determination.
In the diagrm , demand curve DD and supply curve SS of wheat intersect each other at point E and as a result , Equilibrium price of OP is determined.
Suppose , the equilibrium price OP is very high and many poor people are unable to afford wheat at that Price .
Please go through the video link carefully to understand the topic better
Please go through the video link to understand the topic better
No comments:
Post a Comment