Welcome, students! This comprehensive guide provides detailed, text-backed solutions for all the In-Text Activities (Let’s Explore, Think About It) and the End-of-Chapter Exercises for Chapter 9: The Price Puzzle: What Drives the Market of the Class 9 Social Science (Economics) NCERT textbook. These answers are designed to help you master concepts like demand, supply, and market equilibrium to score maximum marks in your examinations.
Part 1: In-Text Activities & Questions
LET’S EXPLORE (Page 3)
1. What happens to the supply of a product in case of a change in the cost of inputs, discovery of an alternate input, depletion of resources, change in weather, disaster, etc.? Discuss in class using examples of diverse goods and services.
Answer:
Change in the cost of inputs: If the cost of raw materials (inputs) increases, the cost of production goes up, leading to a decrease in supply (e.g., if steel prices rise, the supply of cars may decrease).
Discovery of an alternate input: If a cheaper or more efficient alternative input is found, the cost of production decreases, leading to an increase in supply (e.g., using synthetic rubber instead of natural rubber for making tires).
Depletion of resources: If natural resources used for production are exhausted, the supply of the product will decrease (e.g., overfishing reducing the supply of certain fish in the market).
Change in weather/disaster: Natural disasters or adverse weather conditions can destroy crops or disrupt supply chains, drastically reducing the supply of agricultural goods (e.g., a severe drought decreasing the supply of wheat or cotton).
THINK ABOUT IT (Page 10)
1. Can you think of another real-life example (other than hotels) where prices change frequently? Explain why the prices keep changing.
Answer:
Another real-life example where prices change frequently is airline tickets. The prices change constantly based on the dynamic interaction of demand and supply. During holiday seasons or weekends, the demand for flights increases, causing prices to surge. Conversely, during off-peak times or if booked months in advance, demand is lower, so prices are dropped to attract more buyers and ensure the flight is fully booked.
THINK ABOUT IT (Page 11)
1. Have you ever seen or heard of the government fixing prices or wages (for example, bus fares, medicines, or minimum wages)? Share an example and why you think it was done.
Answer:
Yes, the government often fixes the Minimum Support Price (MSP) for agricultural crops like wheat and rice. This is done to protect farmers from sudden price drops in the open market, ensuring they receive a fair, guaranteed income. Another common example is the government fixing the maximum retail price (MRP) for essential and life-saving medicines so that they remain affordable and accessible for all citizens, especially the poor.
LET’S EXPLORE (Page 12)
1. From your surroundings, list two goods or services that are provided by the government (for example: roads, streetlights, parks, police, and so on.). Choose one of the goods you listed and answer:
Answer:
Examples chosen: Streetlights and Public Parks. (Choosing Public Parks):
Who does benefit from it? The entire community benefits from it. It provides a space for children to play, adults to exercise, and improves the overall environment and well-being of the neighborhood.
Why would it be difficult for a private company to provide this service on its own? It is difficult because a public park is a “public good.” It is hard to exclude non-payers from entering an open park, and it is challenging to charge every individual an entry fee profitably. Private companies operate for profit, and providing free public spaces doesn’t generate direct revenue.
Imagine the government stops providing this good or service, what problems might people in your area face? If the government stops providing public parks, people would lose safe, green spaces for recreation. It could lead to a decline in physical and mental health within the community, and children would be forced to play on unsafe streets.
Part 2: End-of-Chapter Questions and Activities
1. An increase in income always leads to a rise in demand for goods. Defend or refute, giving reasons for the same.
Answer:
I refute this statement. While an increase in income generally leads to a rise in demand for “normal goods” (like branded clothes, electronics, or eating out), it does not apply to “inferior goods.” For example, as people’s income increases, their demand for low-quality grains or crowded public transport might actually decrease because they can now afford higher-quality grains or personal vehicles. Therefore, an increase in income does not always lead to a rise in demand for all types of goods.
2. If petrol prices double, what happens to:
Answer:
a. Demand for diesel cars: The demand for diesel cars may increase, as people shift away from expensive petrol cars towards diesel cars (assuming diesel remains relatively cheaper). They act as substitute goods in this context.
b. Demand for electric cars: The demand for electric cars will increase significantly, as consumers look for cheaper long-term running costs and sustainable alternatives to petrol-run vehicles.
c. Demand for car accessories: The demand for car accessories may decrease. Since the cost of running cars has become very expensive, people might drive less or delay buying new cars entirely, thereby reducing the need to buy accessories.
d. Demand for public transport: The demand for public transport will increase, as people will try to avoid using their personal vehicles to save money on expensive petrol.
3. A farmer traditionally irrigates fields manually (labour-intensive). He installs drip irrigation (a technology upgrade) that reduces water use by 40 per cent and increases yield by 30 per cent. How does this affect:
Answer:
a. His cost of production: His cost of production per unit will likely decrease because he is saving money on water and manual labour, while simultaneously getting a higher output (yield) from the same piece of land.
b. His willingness to supply at different prices: Due to lower production costs and higher yields, his profit margin expands. This increases his willingness to supply more quantity of crops at any given market price.
c. The overall market supply if many farmers adopt this technology: The overall market supply of the crop will increase significantly. The market supply curve will shift to the right, which could potentially lower the equilibrium price of the crop for consumers.
4. During online festival sales, the prices of many products are very low. Use the concept of demand and supply to explain why the sellers sell at such a low price. What happens to the equilibrium when the price is lowered? Does this benefit only consumers or sellers as well? Explain.
Answer:
Sellers lower prices during festival sales to drastically increase demand (quantity demanded). By offering heavy discounts, they attract a huge volume of buyers. When the price is lowered below the normal equilibrium price, it temporarily creates an excess demand in the market. However, sellers prepare for this by bringing in massive inventory (excess supply).
This strategy benefits both. Consumers benefit by getting desired products at cheaper, affordable prices. Sellers benefit because the massive volume of goods sold compensates for the lower profit margin per item, resulting in higher overall revenue and helping them clear out old stock quickly.
5. Suppose the government sets a maximum sale price for an essential vaccine below the market-driven price. What is likely to happen? Choose from the options below and elucidate your point.
a. Surplus
b. Shortage
c. No effect
d. Fall in demand
Answer:
b. Shortage
Elucidation: When the government sets a maximum sale price (price ceiling) below the natural equilibrium price, the quantity demanded by the public increases because the vaccine is now highly affordable. However, the quantity supplied by pharmaceutical companies decreases because their profit margins are reduced at this forced lower price. This mismatch (Demand is greater than Supply) creates a severe shortage of the essential vaccine in the market.
6. The government levies higher taxes on products such as tobacco and alcohol to promote healthier choices among citizens. Can you find out other goods where price controls have been set in place? What are the reasons for the same?
Answer:
The government frequently sets price controls (price ceilings) on essential medicines and life-saving drugs to ensure they remain affordable and accessible to the poor, rather than being sold at exorbitant market prices. Similarly, the government controls the prices of essential food grains (like wheat and rice, distributed through the Public Distribution System or ration shops) to ensure food security for below-poverty-line families and protect them from sudden market inflation.
7. Can excessive government regulation hurt markets? Explain with suitable examples.
Answer:
Yes, excessive government regulation can severely hurt markets by stifling innovation, creating inefficiencies, and leading to shortages. For example, if the government sets strict price ceilings on agricultural produce that are too low, farmers might find it unprofitable to grow crops, leading to nationwide food shortages. Additionally, excessive taxation or strict, complex licensing laws can discourage private enterprises from investing in new businesses, thereby slowing down economic growth and employment generation.
8. In the table below, different prices of guava are given. Fill in the table and create a graph.
Answer:
(Note: This is a practical activity based on individual preferences. A sample response is provided below to demonstrate the law of demand.)
| Price | You (kg) | Friend 1 (kg) | Friend 2 (kg) | Friend 3 (kg) | Total Demand (kg) |
|---|---|---|---|---|---|
| ₹100/kg | 0.5 | 1 | 0.5 | 1 | 3 |
| ₹80/kg | 1 | 1.5 | 1 | 2 | 5.5 |
| ₹50/kg | 2 | 2 | 1.5 | 3 | 8.5 |
| ₹20/kg | 4 | 5 | 3 | 5 | 17 |
Observation for graph: As the price of guava decreases, the total quantity demanded by all individuals increases, showing a standard downward-sloping demand curve.
9. Visit the nearby vegetable market and try to find answers to the following questions.
Answer:
a. Who decides the prices of different vegetables in the vegetable market? The prices are not decided by a single person; they are determined by the market forces of demand and supply—the interaction between the buyers (consumers) and sellers (vendors/farmers).
b. Sometimes the prices of a few vegetables is too high, and sometimes too low. Why is this? This happens due to fluctuations in supply. If a crop is destroyed by bad weather (low supply), prices soar. If there is a bumper harvest and markets are flooded with crops (high supply), prices drop.
c. The price of tomatoes is high in the morning and eventually gets lower by the evening. Have you ever noticed this? Comment. Yes. In the morning, the vegetables are fresh, and demand is high, so vendors charge a premium price. By evening, the vegetables lose freshness, and vendors want to clear their perishable stock before it spoils. Therefore, they increase their willingness to sell at lower prices, causing the price to drop.
10. Categorise the following combination of goods into substitute goods and complementary goods.
Answer:
a. Movie ticket in the cinema hall and popcorn: Complementary goods (consumed together).
b. Eraser and pencil: Complementary goods.
c. Laptop and computer: Substitute goods (can be used in place of each other).
d. Air Conditioner and cooler: Substitute goods.
e. Notebook and pen: Complementary goods.
f. Apple and banana: Substitute goods (fruits eaten in place of each other).
g. Mobile and earphones: Complementary goods.
11. Fig. 9.8 shows the demand curve DD’ and Supply curve SS’. Based on the figure, answer the following questions:
Answer:
a. What does point E represent in this market? Point E represents the Market Equilibrium, where the quantity demanded exactly equals the quantity supplied.
b. What is the equilibrium price and equilibrium quantity at point E? Based on standard graphs, the equilibrium price is represented on the Y-axis and equilibrium quantity on the X-axis where the curves intersect at E.
c. What do the points A and B indicate about demand and supply? What does the gap between A and B represent? Point A lies on the demand curve, showing the low quantity demanded at a high price. Point B lies on the supply curve, showing the high quantity supplied at that same high price. The gap between A and B represents Excess Supply (a surplus in the market).
d. What do the points F and C indicate about demand and supply? What does the gap between C and F represent? Point C lies on the supply curve, showing the low quantity supplied at a low price. Point F lies on the demand curve, showing the high quantity demanded at that same low price. The gap between C and F represents Excess Demand (a shortage in the market).
e. If the price stays at the lower dashed line, what could happen next in a free market? Due to the shortage (excess demand), buyers will start offering higher prices to secure the product. This will incentivize sellers to increase production, gradually pushing the price and quantity back up towards the equilibrium point (E).
12. Draw a market equilibrium graph using the following demand schedule.
Answer:
a. Plot the demand and supply curve using the above data. (Students should plot Price on the Y-axis and Quantity on the X-axis. The Demand curve slopes downwards, and the Supply curve slopes upwards.)
b. Identify the equilibrium price and quantity. The equilibrium is where Quantity Demanded equals Quantity Supplied. According to the table, at Price ₹30, both Q.D. and Q.S. are 15 kg. Therefore, Equilibrium Price = ₹30, Equilibrium Quantity = 15 kg.
c. Observe the above data and analyse what happens if the price is set at ₹20 or ₹40.
– At ₹20: Quantity demanded is greater than Quantity supplied. This mismatch creates an Excess Demand (Shortage).
– At ₹40: Quantity supplied is greater than Quantity demanded. This creates an Excess Supply (Surplus).
NCERT Solutions Class 9 Social Science Related Chapters
- NCERT Solutions Class 9 Social Science Chapter 1: Understanding Social Science
- NCERT Solutions Class 9 Social Science Chapter 2: Shaping of the Earth’s Surface
- NCERT Solutions Class 9 Social Science Chapter 3: Atmosphere and Climate
- NCERT Solutions Class 9 Social Science Chapter 4: Early Humans and Beginning of Civilisation
- NCERT Solutions Class 9 Social Science Chapter 5: State and Society up to 1000 CE
- NCERT Solutions Class 9 Social Science Chapter 6: Democracy
- NCERT Solutions Class 9 Social Science Chapter 7: Elections
- NCERT Solutions Class 9 Social Science Chapter 8: Building Blocks in Economics: The Problem of Choice