The Price Puzzle What Drives the Market Class 9 Question Answer SST Chapter 9

Detailed Understanding Society India and Beyond Class 9 Solutions and Class 9 Social Science SST Chapter 9 The Price Puzzle What Drives the Market Question Answer NCERT Solutions make it easier to complete textbook exercises.

Class 9 SST Chapter 9 The Price Puzzle What Drives the Market Question Answer

Class 9 The Price Puzzle What Drives the Market Question Answer

The Big Questions (Page No. 195)

Question 1.
What are the factors that influence the demand and supply of goods and services in a market?
Answer:
The demand for goods and services is influenced by factors such as the price of related goods, consumer income, tastes and preferences, seasonality, and future price expectations. Supply is influenced by the prices of related goods, the number of sellers, technology, and producers’ future expectations. These factors affect the quantity demanded and supplied even when the product’s own price remains unchanged.

Question 2.
How are the prices of goods and services determined through the demand and supply interactions?
Answer:
Prices are determined by the interaction of demand and supply in the market. When demand is greater than supply, prices tend to rise. When supply is greater than demand, prices tend to fall. The price adjusts until the quantity demanded equals the quantity supplied, creating market equilibrium where there is neither a shortage nor a surplus.

Question 3.
What is market equilibrium, and does it exist in the real world?
Answer:
Market equilibrium is the situation where the quantity demanded equals the quantity supplied at a particular price. However, it is not a fixed condition in the real world. Changes in demand, supply, consumer preferences, technology, government policies, weather, and other factors continuously shift the equilibrium, causing markets to adjust to a new equilibrium over time.

Question 4.
How and why does the government intervene in the market?
Answer:
The government intervenes in the market to protect consumers and producers, regulate unfair practices, provide public goods, and promote social welfare. It may fix price ceilings and price floors, regulate monopolies, prevent hoarding and black marketing, and establish regulatory authorities to ensure that markets function fairly and efficiently.

The Price Puzzle What Drives the Market Question Answer Class 9

InText Questions

Question 1.
Create your own demand schedule for buying notebooks at different prices. At what price would you buy the most? At what price would you stop buying altogether? What could be the reason behind your choices? (Page 200)
Answer:
Individual Demand Schedule for Notebooks

Price per Notebook (₹)	Quantity Demanded (Notebooks)
100	1
80	2
60	3
40	5

I would buy the maximum number of notebooks at ₹ 40 because they are more affordable. I would stop buying notebooks if the price reached ₹ 100 or above, as it would exceed my budget. Lower prices encourage me to buy more, whereas very high prices reduce my willingness and ability to purchase.

Question 2.
Ask your family members if they postponed or preponed buying any product because of future expectations of changes in price. (Page 200)
Answer:
My family postponed buying a television because they expected festive discounts during Diwali. They believed the price would fall and attractive offers would be available. As a result, they waited for the sale and purchased the television at a lower price, saving money. This shows how expectations about future prices influence present buying decisions.

Question 3.
In the chapter ‘Democracy’, you have read that a democratic government is accountable to the people and is expected to act in their interest.

1. According to you, how should a democratic government decide when and how much it should intervene in markets to protect people’s welfare?
2. Whose voices should a democratic government consider while making such decisions—consumers, producers, workers, or others? Why?

Answer:

1. A democratic government should intervene when markets fail to function fairly or efficiently. The extent of intervention should depend on the seriousness of the problem. It should ensure fair prices, protect public welfare, and maintain a balance between consumer interests and economic growth.
2. A democratic government should consider the views of consumers, producers, workers, and other stakeholders. Each group is affected differently by market decisions. This helps ensure fair decisions, protect public welfare, and promote balanced economic development.

The Price Puzzle What Drives the Market Class 9 Questions and Answers

Questions and Activities (Page No. 210-213)

Question 1.
An increase in income always leads to a rise in demand for goods. Defend or refute, giving reasons for the same.
Answer:
The statement can be refuted. An increase in income does not always increase the demand for every good. While demand for many normal goods may rise, consumers may reduce their demand for certain goods if they shift to better-quality alternatives. Therefore, the effect of income on demand depends on the type of good and consumer preferences.

Question 2.
If petrol prices double, what happens to
(a) Demand for diesel cars
(b) Demand for electric cars
(c) Demand for car accessories
(d) Demand for public transport
Answer:
(a) Demand for diesel cars may increase because they become a relatively cheaper alternative to petrol cars.
(b) Demand for electric cars is likely to increase as consumers shift to vehicles with lower running costs.
(c) Demand for car accessories may decrease if fewer people buy new petrol cars or reduce their overall spending on vehicles.
(d) Demand for public transport is likely to increase because it becomes a more economical option than using private petrol vehicles.

Question 3.
A farmer traditionally irrigates fields manually (labour-intensive). He installs drip irrigation (a technology uPagerade) that reduces water use by 40% and increases yield by 30%. How does this affect-
(a) His cost of production
(b) His willingness to supply at different prices
(c) The overall market supply if many farmers adopt this technology
Answer:
(a) His cost of production is likely to decrease due to efficient use of water and resources.
(b) He will be willing to supply more at different lower prices because production becomes more efficient.
(c) The overall market supply will increase as more farmers produce larger quantities.

Question 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:
During online festival sales, sellers reduce prices to attract more customers and increase the quantity sold. Lower prices encourage higher demand, helping sellers clear inventory and increase overall sales. When the price is reduced, the market adjusts towards a new equilibrium where a larger quantity of goods is sold. Consumers benefit by purchasing products at lower prices, while sellers also benefit through higher sales volume, better inventory management, and increased customer satisfaction.

Question 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
When the government fixes the maximum price below the market price, consumers demand more vaccines because they become affordable. However, producers may reduce supply due to lower profits. As a result, demand becomes greater than supply, leading to a shortage of vaccines.

Question 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 has also fixed prices for some essential medicines to make them affordable for everyone. It also regulates the prices of fertilisers to support farmers and encourage agricultural production. These price controls help protect consumers, improve access to essential goods, and promote public welfare.

Question 7.
Can excessive government regulation hurt markets? Explain with suitable examples.
Answer:
Yes. Excessive government regulation can increase compliance costs, reduce producers’ incentives, and discourage innovation. For example, strict price controls on agricultural products like wheat and rice are sometimes imposed by the government to keep prices affordable for consumers. However, this may reduce farmers’ income and discourage them from increasing production.

Question 8.
In the table below, different prices of guava are given.

(a) Think and write how much guava you will buy at each price.
(b) Ask the same question to three of your friends and fill in the table.
(c) Also make a graph for each one of you and one final graph for the total quantity.
Answer:

Price	You	Friend 1	Friend 2	Friend 3	Total
₹ 100/kg	1 kg	1 kg	2 kg	1 kg	5 kg
₹ 80/kg	2 kg	2 kg	3 kg	2 kg	9 kg
₹ 50/kg	3 kg	4 kg	4 kg	3 kg	14 kg
₹ 20/kg	5 kg	5 kg	6 kg	5 kg	21 kg

The table shows that as the price of guava decreases, the quantity demanded by each consumer increases. The graph prepared from this data would show a downward-sloping demand curve, illustrating the Law of Demand.

Question 9.
Visit the nearby vegetable market and try to find answers to the following questions.
(a) Who decides the prices of different vegetables in the vegetable market?
(b) Sometimes the prices of a few vegetables are too high, and sometimes too low. Why is this?
(c) The price of tomatoes is high in the morning and eventually gets lower by the evening. Have you ever noticed this? Comment.
Answer:
(a) The prices of vegetables are mainly decided by the interaction of demand and supply in the market.
(b) Prices become high when demand is greater than supply and low when supply is greater than demand. Weather conditions, seasonal changes, transport costs, and the availability of vegetables also affect prices.
(c) Yes, this is commonly observed. Tomatoes are perishable goods, so sellers often reduce their prices by evening to sell the remaining stock and avoid losses due to spoilage.

Question 10.
Categorise the following combination of goods into substitute goods and complementary goods.
(i) Movie ticket in the cinema hall and popcorn
(ii) Eraser and pencil
(iii) Laptop and computer
(iv) Air Conditioner and cooler
(v) Notebook and pen
(vi) Apple and banana
(vii) Mobile and earphones
Answer:

Combination of Goods	Category
Movie ticket in the cinema hall and popcorn	Complementary Goods
Eraser and pencil	Complementary Goods
Laptop and computer	Substitute Goods
Air Conditioner and cooler	Substitute Goods
Notebook and pen	Complementary Goods
Apple and banana	Substitute Goods
Mobile and earphones	Complementary Goods

Question 11.
The figure below shows the demand curve DD’ and Supply curve SS’. Based on the figure, answer the following questions.

(a) What does point E represent in this market?
(b) What is the equilibrium price and equilibrium quantity at point E?
(c) Point A lies on DD’. Point B lies on SS’. What do the points A and B indicate about demand and supply? What does the gap between A and B (both on the upper dashed price line) represent?
(d) Point F lies on DD’. Point C lies on SS’. What do the points F and C indicate about demand and supply? What does the gap between C and F (both on the lower dashed price line) represent?
(e) If the price stays at the lower dashed line, what could happen next in a free market?
Answer:
(a) Point E represents the market equilibrium, where quantity demanded equals quantity supplied.
(b) Equilibrium Price = ₹ 250
Equilibrium Quantity = 30 kg
(iii) Point A shows the quantity demanded, and point B shows the quantity supplied at a higher price. The gap between them represents excess supply (surplus).
(iv) Point F shows the quantity demanded, and point C shows the quantity supplied at a lower price. The gap between them represents excess demand (shortage).
(v) The shortage will create pressure on prices to rise. As the price increases, demand will decrease, and supply will increase until the market reaches equilibrium.

Question 12.
Draw a market equilibrium graph using the following demand schedule.

(a) Plot the demand and supply curve using the above data.
(b) Identify the equilibrium price and quantity.
(c) Observe the above data and analyse what happens if the price is set at ₹ 20 or ₹ 40.
Answer:
(a)

(b) The equilibrium price is ₹ 30, and the equilibrium quantity is 15 kg, where quantity demanded equals quantity supplied.
(c) At ₹ 20, the quantity demanded is 10 kg, while the quantity supplied is 20 kg. This creates a surplus of 10 kg because supply is greater than demand.
At ₹ 40, the quantity demanded is 20 kg, while the quantity supplied is 10 kg. This creates a shortage of 10 kg because demand is greater than supply.
In a free market, prices tend to adjust until equilibrium is restored.