Simple Applications of Tools of Demand and Supply
This chapter of the NCERT Class 11 Introductory Microeconomics textbook, Chapter 5, shows how the tools of demand and supply are used to study government price intervention. It explains price ceiling through examples such as rent control, where a legal maximum set below equilibrium creates excess demand and shortage, and price floor through examples such as minimum support prices for foodgrains and minimum wages, where a legal minimum set above equilibrium creates excess supply and surplus. It traces the effects on buyers, sellers and allocation.
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