Question

In the table below what will be equilibrium market price?

Price (Rs)	Demand (tonnes per annum)	Supply (tonnes per annum)
1	1,000	400
2	900	500
3	800	600
4	700	700
5	600	800
6	500	900
7	400	1,000
8	300	1,100

• A. Rs. 2
• B. Rs. 3
• C. Rs. 4
• D. Rs. 5

Answer 1

The correct option is C Rs. 4

At the equilibrium level, market demand is equal to market supply. In the above schedule at the price level of Rs. 4, market demand = market supply = 700