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 what is market equilibrium?????????

hi garima.. well here is the answer to your question..

market equilibrium refers to that situation where the total demand in the economy equals the total supply prevailing in the economy.. in other words when the aggregate demand is equal to the aggregate supply there exists a market equilibrium condition.. since there is no shortage or excess supply in the market the price remains stable..

in the graph where the quantity supplied intersects the quantity demanded , the corresponding price level would b the equilibrium price in the market..

fig3_9.jpg

in this diagram..in order to clear ur doubt red curve is the supply curve and blue curve is the demand curve..where the supply curve and demand curve r intersecting is the equilibrium point as it has been also mentioned in the graph..it means that the market would b producing 35000 bushels of soyabeans when the price of soyabeanper bushel would be rs.2.5..

hope u got ur answer..for any further help..inform me!!!!

cheers !!

keep smiling...  :)

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 thanxx........

one more question...

what is the difference between positive and normative economy? explain with examples?

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no thnxx sweets !!!

well... the differences are gvn below... in paragraphss..

positive economies are those economies which are mainly operated on the study of economic reality within which an economy operates..it takes into considerations only the positive facts or statments prevailing in the economy rather than considering the opinions ..these facts can be either approved by the economy or not approved by the economy..however it does not count that.. eg - indian economy purchased 50000000 raw materials from kenya.. dis statement is a positive statement since it is a simple declaration of a fact !

on the other hand ..normative economies are referred to as those economies which studies the opinions and judgements prevailing in the economy.. it takes in2 consideration of how a world economy should be for the betterment of the people living within an economy.. example..the indian economy should reduce tax burden on the poor people..

wel...another difference would be..positive economies are also known as descriptive economy whereas normative economy are also referred to as policy economy..

hope u have cleared ur doubt !

cheers!!

keep smiling ! :)

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Market equilibrium refers to the situation when market demand is equal to the market supply
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