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Home Questions 33CH9B7J3K
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Market Equilibrium

Question:

Match List-I with List-II

List-I

List-II

(A) Increase in demand > Increase in Supply

(I) Increase in both equilibrium price and quantity.

(B) Increase in demand < Increase in Supply

(II) Decrease in both equilibrium price and quantity.

(C) Increase in demand = Increase in Supply

(III) Decrease in equilibrium price but increase in equilibrium quantity.

(D) Decrease in demand < Decrease in supply

(IV) Increase in equilibrium quantity but no change in equilibrium price.

Choose the correct answer from the options given below:

Options:

(A)-(I), (B)-(II), (C)-(IV), (D)-(III)

(A)-(I), (B)-(III), (C)-(IV), (D)-(II)

(A)-(II), (B)-(I), (C)-(IV), (D)-(III)

(A)-(III), (B)-(I), (C)-(IV), (D)-(II)

Correct Answer:

(A)-(I), (B)-(III), (C)-(IV), (D)-(II)

Explanation:

The correct answer is Option (2) → (A)-(I), (B)-(III), (C)-(IV), (D)-(II)

List-I

List-II

(A) Increase in demand > Increase in Supply

(I) Increase in both equilibrium price and quantity.

(B) Increase in demand < Increase in Supply

(III) Decrease in equilibrium price but increase in equilibrium quantity.

(C) Increase in demand = Increase in Supply

(IV) Increase in equilibrium quantity but no change in equilibrium price.

(D) Decrease in demand < Decrease in supply

(II) Decrease in both equilibrium price and quantity.

 

  • (A) Increase in demand > Increase in supply: Demand rises more than supply, so both equilibrium price and quantity increase. Hence, (A) → (I)
  • (B) Increase in demand < Increase in supply. Supply rises more than demand, causing equilibrium price to fall while equilibrium quantity increases. Hence, (B) → (III)
  • (C) Increase in demand = Increase in supply. Equilibrium quantity increases but price remains unchanged. Hence, (C) → (IV)
  • (D) Decrease in demand < Decrease in supply. Supply decreases more than demand, leading to a decrease in equilibrium quantity. Hence, (D) → (II)

Note: In case (D) → “Decrease in demand < Decrease in supply,” the decrease in supply is greater than the decrease in demand. In such a situation, equilibrium quantity decreases, while equilibrium price generally tends to rise. Therefore, List-II option (II) → “Decrease in both equilibrium price and quantity” may appear conceptually inconsistent to students. Hence, there is some ambiguity in the wording/matching provided in the question regarding the price effect.

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