Ring deficient demanda)Market price remains the sameb)Market price risec)Market price falls below the equilibrium priced)Market price fallCorrect answer is option 'D'. Can you explain this answer?

Question

Answer

Deficient demand refers to the situation when aggregate demand (AD) is less than the aggregate supply (AS) corresponding to full employment level of output in the economy. ... The situation of deficient demand arises when planned aggregate expenditure falls short of aggregate supply at the full employment level.

Answer

Supply of goods and services increases,demand will remains the same,prices tend to fall.

Answer

Hi

Answer

Ring deficient demand occurs when the market price falls below the equilibrium price. In this situation, the quantity demanded by consumers exceeds the quantity supplied by producers, resulting in a shortage or deficiency in the market.

Explanation:

Equilibrium price is the price at which the quantity demanded by consumers equals the quantity supplied by producers. It represents a balance between supply and demand in the market. Any deviation from the equilibrium price leads to either excess supply (surplus) or deficient demand (shortage).

In the case of ring deficient demand, the market price falls below the equilibrium price. This means that the price at which goods or services are being sold in the market is lower than what consumers are willing to pay. As a result, the quantity demanded by consumers exceeds the quantity supplied by producers.

There are several factors that can cause ring deficient demand:

1. Increase in consumer demand: If there is a sudden increase in consumer demand for a particular product or service, it can lead to a shortage in the market. Consumers are willing to pay a higher price to acquire the product or service, but producers are unable to meet the increased demand at the current price level.

2. Supply disruptions: Any disruptions in the supply chain, such as natural disasters, strikes, or shortages in raw materials, can lead to a deficiency in the market. If producers are unable to supply goods or services at the same level as before, it can result in a shortage and push the market price below the equilibrium price.

3. Government interventions: Government policies such as price controls or subsidies can also lead to ring deficient demand. If the government sets a maximum price below the equilibrium price, it can create a shortage in the market as producers are unwilling to supply goods or services at a lower price.

Consequences of ring deficient demand:

- Shortage of goods or services in the market.
- Consumers may have to wait or pay higher prices to acquire the product or service.
- Producers may benefit from higher prices, but they may not be able to fully meet the increased demand.
- The imbalance between supply and demand can lead to market inefficiencies and distortions.

In conclusion, ring deficient demand occurs when the market price falls below the equilibrium price, resulting in a shortage or deficiency in the market. Factors such as increased consumer demand, supply disruptions, and government interventions can contribute to ring deficient demand. The consequences include shortages, higher prices, and market inefficiencies.

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