CBSE Class 12 Economics Chapter 7: Supply NCERT Solutions
This chapter focuses on understanding the concept of supply in economics, specifically within the context of a market. The NCERT Solutions for Class 12 Economics, Chapter 7: Supply, provide detailed explanations and step-by-step solutions to textbook questions. These solutions help students grasp how to calculate market supply by aggregating the supply of individual firms. They cover scenarios with two and three identical firms, demonstrating the process of summing up individual supply schedules at different price points to derive the total market supply. The exercises emphasize the relationship between price and quantity supplied and how to construct a market supply schedule. These solutions are crucial for students preparing for their board examinations, offering clarity on fundamental supply concepts and their practical application in market analysis.
Quick info
| Board | CBSE |
|---|---|
| Class | Class 12 |
| Subject | Economics. |
| Session | 2026 |
| Language | English |
| Type | NCERT Solutions |
| Chapter | 7. Supply |
Chapter summary
Chapter 7, 'Supply,' in the Class 12 Economics NCERT Solutions, delves into the fundamental principles of supply in a market. It covers how to determine the market supply schedule by summing the quantities supplied by individual firms at various price levels. The solutions provide practical examples with two and three firms, illustrating the aggregation process. This chapter is essential for understanding market dynamics and how individual firm behavior contributes to the overall market supply.
Learning outcomes
- Understand the concept of market supply.
- Calculate the market supply schedule from individual firm supply schedules.
- Analyze the relationship between price and quantity supplied.
- Apply summation techniques to aggregate supply from multiple firms.
- Interpret supply schedules presented in tabular form.
Topics covered
Paper topics
- Supply Schedule
- Market Supply
- Individual Firm Supply
- Aggregation of Supply
- Price-Quantity Relationship
- Market Equilibrium (implied)
Important topics
- Calculating Market Supply Schedule
- Summing Individual Firm Supplies
- Understanding Price and Quantity Supplied
- Market Supply Dynamics
PDF preview
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Questions and Solutions
Question 1
Price (₹)
| Price (₹) | SS₁ (in units) | SS₂ (in units) |
|---|---|---|
| 0 | 0 | 0 |
| 1 | 0 | 0 |
| 2 | 0 | 0 |
| 3 | 1 | 1 |
| 4 | 2 | 2 |
| 5 | 3 | 3 |
| 6 | 4 | 4 |
The market supply schedule represents the total quantity of a good that all firms in the market are willing and able to supply at various price levels. To compute the market supply schedule, we need to sum the quantities supplied by Firm 1 (SS₁) and Firm 2 (SS₂) at each given price.
Market Supply (MS) = Supply of Firm 1 (SS₁) + Supply of Firm 2 (SS₂)
Here is the computed market supply schedule:
| Price (₹) | SS₁ (units) | SS₂ (units) | Market Supply (SS₁ + SS₂) (units) |
|---|---|---|---|
| 0 | 0 | 0 | 0 + 0 = 0 |
| 1 | 0 | 0 | 0 + 0 = 0 |
| 2 | 0 | 0 | 0 + 0 = 0 |
| 3 | 1 | 1 | 1 + 1 = 2 |
| 4 | 2 | 2 | 2 + 2 = 4 |
| 5 | 3 | 3 | 3 + 3 = 6 |
| 6 | 4 | 4 | 4 + 4 = 8 |
Thus, the market supply schedule is derived by adding the quantities supplied by each firm at every price point.
Question 2
Price (₹)
| Price (₹) | SS₁ (Kg) | SS₂ (Kg) |
|---|---|---|
| 0 | 0 | 0 |
| 1 | 0 | 0 |
| 2 | 0 | 0 |
| 3 | 1 | 0 |
| 4 | 2 | 0.5 |
| 5 | 3 | 1 |
| 6 | 4 | 1.5 |
| 7 | 5 | 2 |
| 8 | 6 | 2.5 |
The market supply schedule is the sum of the quantities supplied by all individual firms in the market at each price. In this case, we have two firms, Firm 1 and Firm 2. We will add their respective supplies (SS₁ and SS₂) at each price level to find the Market Supply (MS).
Market Supply (MS) = Supply of Firm 1 (SS₁) + Supply of Firm 2 (SS₂)
Let's compute the market supply schedule:
| Price (₹) | SS₁ (Kg) | SS₂ (Kg) | Market Supply (SS₁ + SS₂) (Kg) |
|---|---|---|---|
| 0 | 0 | 0 | 0 + 0 = 0 |
| 1 | 0 | 0 | 0 + 0 = 0 |
| 2 | 0 | 0 | 0 + 0 = 0 |
| 3 | 1 | 0 | 1 + 0 = 1 |
| 4 | 2 | 0.5 | 2 + 0.5 = 2.5 |
| 5 | 3 | 1 | 3 + 1 = 4 |
| 6 | 4 | 1.5 | 4 + 1.5 = 5.5 |
| 7 | 5 | 2 | 5 + 2 = 7 |
| 8 | 6 | 2.5 | 6 + 2.5 = 8.5 |
The market supply schedule is obtained by summing the individual supplies of Firm 1 and Firm 2 at each price level.
Question 3
Price (₹)
| Price (₹) | SS₁ (units) |
|---|---|
| 0 | 0 |
| 1 | 0 |
| 2 | 2 |
| 3 | 4 |
| 4 | 6 |
| 5 | 7 |
| 6 | 8 |
| 7 | 10 |
| 8 | 12 |
In this market, there are three identical firms. This means that each firm will supply the same quantity at any given price. The supply schedule for Firm 1 is provided. To find the market supply schedule, we need to sum the quantities supplied by all three firms at each price level.
Since the firms are identical, the supply schedule for Firm 2 and Firm 3 will be the same as Firm 1.
Market Supply (MS) = Supply of Firm 1 (SS₁) + Supply of Firm 2 (SS₂) + Supply of Firm 3 (SS₃)
Since SS₁ = SS₂ = SS₃, we can calculate Market Supply as:
MS = 3 × SS₁
Let's compute the market supply schedule:
| Price (₹) | SS₁ (units) | Market Supply (3 × SS₁) (units) |
|---|---|---|
| 0 | 0 | 3 × 0 = 0 |
| 1 | 0 | 3 × 0 = 0 |
| 2 | 2 | 3 × 2 = 6 |
| 3 | 4 | 3 × 4 = 12 |
| 4 | 6 | 3 × 6 = 18 |
| 5 | 7 | 3 × 7 = 21 |
| 6 | 8 | 3 × 8 = 24 |
| 7 | 10 | 3 × 10 = 30 |
| 8 | 12 | 3 × 12 = 36 |
The market supply schedule is obtained by multiplying the supply of a single firm by the number of identical firms in the market (which is 3 in this case).
Common mistakes
- Incorrectly summing individual supplies to find market supply.
- Errors in reading or transcribing data from supply schedules.
- Misunderstanding the difference between individual and market supply.
Revision tips
- Practice calculating market supply for different numbers of firms.
- Ensure you correctly sum the quantities at each price level.
- Review the relationship between price and quantity supplied in the given schedules.
- Pay close attention to units (e.g., units, Kg) when calculating market supply.
Practice MCQs
Q1. What is the primary method used to calculate the market supply schedule from individual firm supply schedules?
Explanation: Market supply is the horizontal summation of individual supplies, meaning we add up the quantities supplied by all firms at each given price.
Q2. If Firm 1 supplies 5 units and Firm 2 supplies 3 units at a price of ₹10, what is the market supply at that price?
Explanation: Market supply is the sum of individual supplies. Therefore, 5 units + 3 units = 8 units.
Q3. In a market with three identical firms, how is the market supply schedule determined?
Explanation: The market supply schedule represents the total quantity supplied by all firms in the market at each price level. For three firms, it's the sum of their individual supplies.
Q4. What does a supply schedule typically show?
Explanation: A supply schedule illustrates the direct relationship between the price of a good and the quantity that producers are willing and able to supply.
Frequently asked questions
What is the main concept covered in Chapter 7 of Class 12 Economics NCERT Solutions?
Chapter 7 focuses on the concept of 'Supply,' specifically how to determine the market supply schedule by aggregating the supply schedules of individual firms in a market.
How is the market supply schedule calculated in these NCERT Solutions?
The market supply schedule is calculated by summing the quantities supplied by all individual firms at each specific price level. The solutions provide step-by-step examples for markets with two and three firms.
Are the questions in this chapter about individual firm supply or market supply?
The questions primarily focus on calculating the market supply schedule, using the individual firm supply schedules as the base data.
What is the relationship between price and quantity supplied shown in the schedules?
The schedules typically demonstrate a direct relationship: as the price of a good increases, the quantity supplied by firms also increases, assuming other factors remain constant.
How can these solutions help with exam preparation?
These solutions offer clear, step-by-step methods to solve problems related to market supply, reinforcing understanding of core economic principles and improving problem-solving skills for exams.
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