CBSE Class 12 Micro Economics Revision Notes Chapter 5

Class 12 Microeconomics  Chapter 5 Notes 

Now students can refer to the Class 12 Microeconomics Chapter 5 notes available on the Extramarks website to perform better in the exam. It is prepared by subject matter experts  working conscientiously and diligently to prepare authentic, concise answers for the students. The systemic and well-laid-out balanced study plan boosts their performance naturally and effortlessly... It is one of the essential study materials for preparing for board exams. Regular tests and revisions make them aware of their mistakes through guided practice and help to achieve high grades in their exams.

In this chapter- Market Equilibrium, the students can learn about the equilibrium price and the terms of equilibrium quantities. The revision notes play a vital role in helping easier studying methods. Further, the notes are presented with short keynotes that would enhance their preparation. It is presented concisely and in such an organised and systematic manner so that the students can remember it thoroughly while preparing for assignments, tests and exams. 

Stay tuned to the Extramarks website for the latest update on the CBSE syllabus and CBSE previous year’s question paper. To enjoy the maximum benefit of these resources and to know more students are advised to register themselves at the Extramarks website and access the Class 12 Microeconomics Chapter 5 Notes, at their convenience.

Key Topics Covered In Class 12 Microeconomics Chapter 5 Notes

The key topics covered under Class 12 Market Equilibrium Chapter 5 notes include: 

Market:

It’s a way for buyers and sellers to come together to buy and sell a commodity or service at agreed prices.

Market Equilibrium:

It’s a situation where there is enough supply to meet the demand for a particular good. While the market is in equilibrium, prices are not likely to change. If the market costs are equal, the competitive market is balanced if the quantity provided rises to the amount demanded.

Equilibrium is the uniformity between the amount provided and the amount requested.

Equilibrium Price:

The equilibrium price is the value at which the quantity demanded and the amount supplied is equal. The equilibrium price is a condition that has no change. Both the vendor and the purchaser are in equilibrium at the equilibrium price. Hypothetically, this price would mean that the quantity of products required by buyers is equal to the amount provided by vendors.

Equilibrium Quantity:

The term equilibrium quantity refers to the number of goods available on the market when vendors provide the exact amount required by buyers. It is a concept within the field of knowledge about market equilibrium or market imbalance associated with equilibrium price.

Excess Demand:

Markets are said to be over-demanded when the demand for the product is greater than the supply at the current price. Exceeding order is created at a lower cost than equilibrium. It would be a lure to buyers to come to the markets as prices would drop, which would result in increased competition. 

Yd > Ys

Here, Yd = Market Demand and Ys = Market Supply.

Excess Supply:

An excess supply is a market situation where there is more demand for a commodity than is available. This happens at a price higher than the equilibrium price. Sellers will see it as an opportunity to increase profits and supply since the price will be greater than the equilibrium price.

Value of Marginal Product of Labour: 

This is the additional revenue that a company can generate by adding one employee. It is calculated by adding the marginal labour product to the output price.

Demand Shift:

There are three possible meanings for the term “value of the marginal product of labour”. The “magnitude of marginal product” refers to increased physical output due to adding a new worker. The most common definition of competitive output markets is the price for output multiplied by that size. 

This indicates the worker’s monetary worth in comparison to the marginal monetary costs of the person. The third scenario is when the firm has market power. In this case, the marginal physical product of the firm is multiplied by marginal revenue. In all three scenarios, marginal benefits must be weighed against marginal costs.

Demand Shift:

A shift in demand means that the number of goods and services required will change at all prices.

Supply Shift:

An increase in supply can cause a shift in the supply curve. This creates a market imbalance that can be addressed by changing pricing and demand. As supply changes, the supply curve shifts towards the right. However, the supply curve shifts toward the left when the supply decreases.

Simultaneous Shifts of Demand and Supply:

There are four possible ways simultaneous shifts could occur:

1. Both the supply and demand curves shift to the right.
2. Both the supply and demand curves shift to the left.
3. The demand curve shifts to one side, and the supply curve shifts to the other.
4. The demand curve shifts to the left, while the supply curve shifts towards the right.

Viable Industry:

These industries are called viable industries because their equilibrium can easily be identified. Manufacturing is an example of a viable business.

Non-viable Industry:

A non-viable industry’s demand and supply curves do not intersect at any positive amount. This industry is too expensive to produce any positive results.

Price Ceiling:

Setting a price ceiling is fixing the price at a lower level for certain products that can be made affordable to the poor. The Indian government establishes a price limit on necessities that should be accessible to the poor. These necessities include rice, wheat, sugar, and kerosene.

Price Floor:

It is referred to as a “price floor” when the price charged is greater than or equal to the equilibrium value determined by supply and interest market forces. Observation has shown that lower-price floors are less successful. It has been shown how important a price floor is in the labour market.

The Effects of Imposing a Price Ceiling:

• Placing a price limit causes uncontrollable increases in demand. If the price is lower, people are more likely to increase their market.
• Products are not available to all consumers. A quota was established for certain commodities.

The goods offered under the price limit scheme are usually of lower quality.

Price Determination in Perfect Market Competition:

In a highly competitive market, price is determined by both market demand and supply. Market demand is the sum of all market demands. The market supply is the sum of all supply schedules within a market. The crossing point between market supply and need determines the cost of goods in a completely competitive market.

Wage Determination in Perfect Competitive Labour Market:

In determining the demand for labour, the marginal product of labour plays a crucial role. The marginal revenue product of labour is the wage rate. The supply and demand for labour determine this. In a perfect labour market, the wage rate of a worker is equal to the MRP of labour.

Class 12 Microeconomics Chapter 5 Notes Exercises & Solutions

To score better in the exam, the student can study from Class 12 Microeconomics Chapter 5 notes. Further, they can practice with Class 12 Microeconomics Exercises and  Solutions. It is available on the Extramarks website to refer to, and they can start their preparation for the board exams. The exercise and solutions help the students to grasp the concepts and enhance their speed during problem-solving.

Subject-matter experts make the solutions. They are explained in an elaborate manner and cover the essential subtopics. Further, the vital topics include demand shift, supply shift, and viable industry. Students will also explore the practice of fixing the price of products and necessities. As the exam approaches, it can make the students anxious. Thus, they can practice Economics exercises and solutions. 

Students can visit our website and follow the latest Class 12 Microeconomics Chapter 5 notes updates in addition to the following study materials given below.

CBSE extra questions

CBSE revision notes

CBSE sample papers

CBSE previous year question papers

In addition, students also get sums, MCQs, and short problems to solve in the Class 12 Microeconomics Chapter 5 notes. They can enhance and improve their knowledge of the core concepts by referring to the notes provided by Extramarks. Students may register at Extramarks to access all study materials as per their needs and requirement. . 

Key Features of NCERT Solutions Class 12 Microeconomics Chapter 5 Notes 

The notes are written in easy language, which helps the students save time and perform better in the exam. It also prepares them for the CBSE board exams and competitive exams. All sub-topics are included in the added information at an advanced level. Further, it includes skill-developing questions, and it will help them generalize the concepts and provide more exposure to multiple concept-based questions. It also contains important questions, formulas, and more. 

Some of the key features of Class 12 Microeconomics Chapter 5 notes provided by Extramarks include

• Class 12 Microeconomics Chapter 5 notes save time and help the students to grasp the concept quickly and easily. . 
• By referring to the notes, they can strengthen their key concepts and reduce the chances of making careless slips and help them score high grades in board exams. .
• The Class 12 Microeconomics Chapter 5 notes play a vital role and offer short keynotes that could raise their preparations. 
• The Microeconomics Chapter 5 Class 12 notes are explained concisely from the latest syllabus. 
• The Subject Matter Experts prepare the revision notes. as per the latest CBSE curriculum and are thoroughly checked and approved by the experts
• It helps the students to strengthen their studying and give a quick revision on the core concepts. 
• The notes save time and make the preparation for the board exam easier.