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In a shirt market where the price is ₹30, the quantity demanded is 150 shirts and the quantity supplied is 100 shirts, which of the following statements is correct?

medium MCQ 2 marks Class 7 · Social and Political Life · A Shirt in the Market
  1. The market is in equilibrium at ₹30.
  2. There is excess demand in the market.
  3. There is excess supply in the market.
  4. The market price will fall to clear the excess demand.
Answer
There is excess demand in the market.

The correct answer is There is excess demand in the market. — The other options incorrectly state equilibrium, excess supply, or balance.

Step-by-step solution

  1. Compare the given quantities: 150 (demand) > 100 (supply).
  2. When demand exceeds supply at the given price, there is a shortage or excess demand.
  3. The market price will tend to rise until the shortage is eliminated.
  4. Therefore the correct statement is that there is excess demand.
  5. The other options incorrectly state equilibrium, excess supply, or balance.
Common mistake: Choosing that there is excess supply

Concept tested: Identifying excess demand

Published · How this solution was prepared and checked

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