NCERT Solutions Class 9 Social Science (Understanding Society: India and Beyond, Part I) Chapter 9 – The Price Puzzle: What Drives the Market
Circle of Learning • New NCERT textbook (2026-27) • In-text questions, activities and end-of-chapter questions – complete answers
The Big Questions
What are the factors that influence the demand for and supply of goods and services in a market?
Answer
Demand depends on the price of the good, prices of related goods (substitutes and complements), consumers' income, tastes and preferences, the size and composition of the population, seasonality and future price expectations. Supply depends on the price of the good, prices of related goods (alternative products), the number of sellers, technology, input costs, weather and future expectations.
How are prices of goods and services determined through demand and supply interactions?
Answer
Prices settle where the quantity buyers want equals the quantity sellers offer. If supply is less than demand (excess demand), prices rise; if supply is more than demand (excess supply), prices fall. These adjustments push the price towards the equilibrium price, as with mangoes at ₹100 per kg in the chapter.
What is market equilibrium, and does it exist in the real world?
Answer
Market equilibrium is the point where quantity demanded equals quantity supplied, so there is no shortage or surplus and no pressure on prices to change. In the real world, conditions such as technology, wages, weather, pandemics and wars keep changing, so equilibrium keeps moving and markets are always adjusting towards a new one, as seen with face masks during COVID-19.
Answer
How and why does the government intervene in the market?
The government intervenes because markets do not always work fairly – essentials may become unaffordable, monopolies may exploit consumers and public goods are under-provided. It sets price ceilings (e.g., on medicines) and price floors (e.g., minimum wages), regulates monopolies and unfair practices through regulators like RBI, SEBI, TRAI and the Central Consumer Protection Authority, and provides public goods. However, excessive intervention can distort prices, burden businesses and discourage innovation.
Opening Questions (In-text)
Why are vegetables expensive in the morning but cheaper in the evening? Why does the same flight seat cost ₹3,000 on one day but ₹9,000 on another? Why do shops announce discounts at certain times of the year?
Answer
(i) In the morning, vegetables are fresh and many buyers come, so demand is high; by evening, sellers want to clear perishable stock before it spoils, so supply exceeds demand and prices fall.
(ii) Flight fares rise when demand is high (holidays, weekends, last-minute bookings) and seats are limited, and fall when demand is low.
(iii) Shops offer discounts at the end of a season or during festivals to clear old stock and attract more buyers, increasing quantity demanded through lower prices.
All these show that prices respond to demand and supply.
Don't Miss Out (Market Demand Curve)
This box explains that the market demand curve is flatter than Srivalli's individual curve: when the price falls from ₹150 to ₹50, Srivalli's demand rises by 2 kg but market demand rises by 12 kg, because the market adds up many consumers. It has no separate question.
Think About It (Diminishing Marginal Utility)
What happens when you consume the first mango? It tastes delicious. The second one is good. By the third one, you are barely interested. Why do you think this happens?
Answer
This happens because of the principle of diminishing marginal utility: the additional satisfaction (utility) from each extra unit of a product falls as more of it is consumed. The first mango satisfies hunger and desire the most; each further mango adds less satisfaction. As utility falls, the willingness to pay for more units also decreases, so demand falls.
Let's Explore (Demand)
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?
Answer
Sample demand schedule:
Price per notebook | Notebooks I would buy |
|---|---|
₹20 | 8 |
₹40 | 6 |
₹60 | 4 |
₹80 | 2 |
₹120 | 0 |
I would buy the most at ₹20 because I can afford more and stock up for the year. At ₹120 I would stop buying, because it is beyond my budget (pocket money) and I would use loose sheets, a cheaper substitute or old notebooks instead. My choices follow the Law of Demand – quantity demanded falls as price rises.
Ask your family members if they postponed or advanced buying any product because of future expectations of changes in price.
Answer
Sample answer: My parents postponed buying a refrigerator in September because they expected festival discounts during Diwali sales. My grandfather bought extra wheat at harvest time because he expected prices to rise later in the year. This shows how expectations of falling prices reduce present demand, while expectations of rising prices increase present demand.
Let's Explore (Supply)
What happens to the supply of a product in case of a change in the cost of inputs, discovery of an alternate input, depletion of resources, change in weather, disaster, etc.? Discuss in class using examples of diverse goods and services.
Answer
Change | Effect on supply | Example |
|---|---|---|
Rise in cost of inputs | Supply falls (production becomes costlier) | Rise in diesel and fertiliser prices reduces vegetable supply; higher fuel costs raise bus and taxi fares |
Fall in cost of inputs | Supply rises | Cheaper solar panels increase supply of solar power |
Discovery of an alternate input | Supply rises and costs fall | Use of ethanol blending with petrol; synthetic fibres replacing cotton in some clothing |
Depletion of resources | Supply falls | Overfishing reduces the supply of fish; groundwater depletion reduces crop output |
Favourable weather | Supply rises | A good monsoon increases supply of rice and pulses |
Bad weather or disaster | Supply falls and prices rise | Floods or unseasonal rain destroy tomato and onion crops; a cyclone disrupts fishing and electricity supply |
Let's Analyse
Using data from Table 9.3, plot the demand and supply curve at the three prices, i.e., ₹40, ₹100, and ₹150. Identify and mark excess demand and supply on the graph. Think about how equilibrium could be reached in these scenarios.
Answer
Plotting: Take quantity (kg) on the x-axis and price (₹) on the y-axis.
Demand points: (38 kg, ₹40), (12 kg, ₹100), (8 kg, ₹150) – join to get a downward-sloping demand curve.
Supply points: (6 kg, ₹40), (12 kg, ₹100), (43 kg, ₹150) – join to get an upward-sloping supply curve.
The curves cross at E (12 kg, ₹100) – the equilibrium.
Excess demand at ₹40: 38 – 6 = 32 kg (mark the gap between the curves on the ₹40 line).
Excess supply at ₹150: 43 – 8 = 35 kg (mark the gap on the ₹150 line).
Reaching equilibrium: At ₹40, buyers compete for scarce mangoes and sellers raise prices; as the price rises, quantity demanded falls and quantity supplied rises until ₹100. At ₹150, unsold mangoes pile up, so sellers cut prices; quantity demanded rises and quantity supplied falls until the price reaches ₹100 and the market clears.
Think About It (Dynamic Markets)
Can you think of another real-life example (other than hotels) where prices change frequently? Explain why the prices keep changing.
Answer
Sample answer: App-based cab fares change frequently. When many people book cabs at once – during rush hour, rain or after a big event – demand is high while the number of available drivers (supply) is limited, so fares rise ("surge pricing"). Higher fares also encourage more drivers to come online. At quieter times, demand falls and fares come down. Other examples are flight tickets, vegetable prices, gold prices and petrol prices, which change with demand, supply, seasons and global conditions.
Our choices today affect future resources – fast fashion, overfishing and overuse of groundwater can harm future supply. Should we focus only on short-term gains, or also think about long-term sustainability? How could this affect the market equilibrium?
Answer
We should think about long-term sustainability, not only short-term gains. Overusing resources may give cheap goods today, but it depletes them, so future supply falls. For example, overfishing reduces fish stocks; in future, the supply curve shifts left, the equilibrium price rises and the equilibrium quantity falls, making fish costlier and scarcer. Excess groundwater use may later reduce crop output and raise food prices. Sustainable choices – buying fewer but durable clothes, limits on fishing, efficient irrigation – keep future supply stable and prices affordable.
Think About It (Government Fixing Prices)
Have you ever seen or heard of the government fixing prices or wages (for example, bus fares, medicines, or minimum wages)? Share an example and why you think it was done.
Answer
Sample answer: The state government fixes bus fares for government buses so that daily travel remains affordable for students, workers and the poor, who depend on public transport. Similarly, the government fixes the maximum price of essential medicines to prevent overcharging (a price ceiling), and fixes minimum wages so that workers earn enough for their hard work (a price floor). These are done to protect consumers and workers and to ensure fairness.
Let's Recall (Regulators)
Do you remember some regulators from the Grade 7 Social Science chapter 'Understanding Markets'?
Answer
Some market regulators are: the Reserve Bank of India (RBI) for banking; the Securities and Exchange Board of India (SEBI) for the securities market; the Telecom Regulatory Authority of India (TRAI) for telecommunications; the Food Safety and Standards Authority of India (FSSAI) for food safety; the Bureau of Indian Standards (BIS) for product quality (ISI mark, hallmarking); the Competition Commission of India (CCI) against unfair competition and monopolies; and the Central Consumer Protection Authority for consumer rights.
Don't Miss Out (Sanitisers During COVID-19)
During COVID-19, the government declared sanitisers essential commodities under the Essential Commodities Act, 1955, and capped the maximum retail price at ₹100 for 200 ml bottles. How do such price controls affect suppliers and consumers? Do you think such controls should be in practice forever?
Answer
Effect on consumers: They could buy sanitisers at fair prices during an emergency, and hoarding and black-marketing were checked.
Effect on suppliers: Their profit per bottle was limited, and some might reduce supply if costs were high; but because demand was huge, many companies started production, so sanitisers soon became widely available.
Should they be permanent? No. Such controls are useful in emergencies, but if kept forever they can reduce producers' incentive to supply and invest, cause shortages and discourage innovation. Once supply catches up, competition can keep prices fair, so controls should be temporary and reviewed regularly.
Let's Explore (Public Goods)
From your surroundings, list two goods or services provided by the government. Choose one and answer: Who benefits from it? Why would it be difficult for a private company to provide it on its own? If the government stops providing it, what problems might people face?
Answer
Sample answer: Two government-provided goods: streetlights and public parks. Chosen: streetlights.
(i) Who benefits: Everyone using the street at night – pedestrians, cyclists, drivers, shopkeepers and residents – whether or not they pay taxes directly.
(ii) Why difficult for a private company: It is hard to charge each person for using the light, and one person's use does not stop others from using it. People would think "others will pay, I can use it free", so a company could not earn enough profit.
(iii) If the government stopped: Dark streets would lead to more accidents, theft and crime, women and children would feel unsafe, shops would close early and evening movement would reduce.
Let's Recall (Democracy and Markets)
According to you, how should a democratic government decide when and how much it should intervene in markets to protect people's welfare?
Answer
It should intervene when markets fail to protect people – when essentials like medicines or food become unaffordable, monopolies exploit consumers, hoarding occurs in emergencies, workers are underpaid, or public goods are not provided. The intervention should be based on reliable data, be proportionate and, where possible, temporary, so that producers' incentives are not destroyed. Decisions should be discussed openly, reviewed regularly and adjusted, keeping in mind that excessive regulation can distort prices and hurt businesses.
Whose voices should a democratic government consider while making such decisions—consumers, producers, workers, or others? Why?
Answer
It should consider all of them. Consumers need fair prices and safe products; producers and farmers need fair returns to keep producing and investing; workers need decent wages and conditions; small businesses need simple rules; and experts, regulators and civil society can provide data and analysis. Vulnerable and low-income groups deserve special attention. Since a democratic government is accountable to all citizens, balancing these interests leads to fair and lasting decisions.
Questions and activities
An increase in income always leads to a rise in demand for goods. Defend or refute, giving reasons for the same.
Answer
Refute. Generally, when household income rises, people can afford more and better products, so demand for many goods rises even at the same price. But this does not happen for all goods. For some low-quality or cheaper goods, demand falls as income rises because people switch to better substitutes – for example, a family may buy less coarse cloth or cheap rice and more branded clothing or better-quality rice, or use a car instead of a bus. For basic necessities like salt, demand hardly changes with income. So an increase in income does not always increase demand.
Answer
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
a. Diesel cars: Demand rises, as diesel cars become a substitute for petrol cars (assuming diesel prices do not rise similarly).
b. Electric cars: Demand rises sharply, since electricity becomes a much cheaper substitute for running a car.
c. Car accessories: Demand falls, because car accessories are complementary goods; fewer people would buy and use petrol cars.
d. Public transport: Demand rises, as people switch from private vehicles to cheaper buses, metro and trains (a substitute).
A farmer installs drip irrigation, which reduces water use by 40 per cent and increases yield by 30 per cent. How does this affect
Answer
a. His cost of production
b. His willingness to supply at different prices
c. The overall market supply if many farmers adopt this technology
a. His cost per unit of output falls: he uses 40% less water and less manual labour, while his output rises by 30%. (There is an initial investment cost, but over time each kilogram becomes cheaper to produce.)
b. Since production is cheaper and more profitable, he is willing to supply more at every price – his supply curve shifts to the right.
c. If many farmers adopt it, market supply increases (the market supply curve shifts right). With more supply at the same demand, the equilibrium price tends to fall and the equilibrium quantity rises, benefiting consumers; water is also conserved.
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
Why low prices: Sellers often have large stocks (excess supply), older models to clear before new launches, and strong competition from other sellers. Since many people postpone purchases expecting festival discounts, sellers lower prices to attract this pent-up demand and sell large quantities quickly.
Equilibrium: By the Law of Demand, a lower price increases quantity demanded. The market moves to a new equilibrium with a lower price and a much larger quantity sold; surplus stock is cleared.
Who benefits: Both. Consumers get products at lower prices. Sellers gain by selling in high volume, clearing old stock, earning more total revenue despite lower margins, attracting new customers and selling related (complementary) products such as covers and accessories.
Suppose the government sets a maximum sale price for an essential vaccine below the market-driven price. What is likely to happen? Choose from: a. Surplus b. Shortage c. No effect d. Fall in demand
Answer
(b) Shortage. A maximum price (price ceiling) below equilibrium makes the vaccine cheaper, so quantity demanded rises. But producers earn less, so they are willing to supply less. Quantity demanded exceeds quantity supplied, creating excess demand (shortage), long queues and possibly black-marketing. The government may need to subsidise producers or arrange supply itself to make the policy work.
The government levies higher taxes on tobacco and alcohol to promote healthier choices. Can you find out other goods where price controls have been set in place? What are the reasons for the same?
Answer
Good or service | Type of control | Reason |
|---|---|---|
Essential medicines, heart stents and knee implants | Price ceiling by the National Pharmaceutical Pricing Authority | Keep life-saving treatment affordable; prevent overcharging |
Wheat, paddy and other crops | Minimum Support Price (price floor) | Ensure farmers get a fair price and are protected from price crashes |
Labour | Minimum wages (price floor) | Protect workers from exploitation |
Foodgrains under the Public Distribution System | Fixed low prices | Food security for poor households |
Bus fares, auto and taxi fares, electricity tariffs | Regulated fares and tariffs | Affordable public services; prevent monopoly pricing |
Masks and sanitisers during COVID-19 | Price cap under the Essential Commodities Act | Stop hoarding and black-marketing in an emergency |
Can excessive government regulation hurt markets? Explain with suitable examples.
Answer
Yes. (i) Price distortions and reduced incentives: If the government fixes wheat at ₹20 per kg when the market price is ₹30, farmers earn less and may produce less, causing shortages. (ii) Compliance burdens: A small restaurant may need many permissions – food safety, fire safety, pollution control and local clearances – and the time and cost can discourage entrepreneurs, hurting ease of doing business. (iii) Less innovation: If returns are controlled, farmers will not invest in better seeds, irrigation or technology, and firms will not invest in new ideas, lowering long-term productivity. India's pre-1991 licence system, which restricted competition, is another example. So regulation must be balanced and careful.
In the table, different prices of guava are given. a. Write how much guava you will buy at each price. b. Ask three friends and fill the table. c. Make a graph for each of you and a final graph for the total quantity.
Answer
Sample answer:
Price | You | Friend 1 | Friend 2 | Friend 3 | Total (market demand) |
|---|---|---|---|---|---|
₹100/kg | 0.5 kg | 0 kg | 1 kg | 0.5 kg | 2 kg |
₹80/kg | 1 kg | 0.5 kg | 1 kg | 1 kg | 3.5 kg |
₹50/kg | 1.5 kg | 1 kg | 2 kg | 1.5 kg | 6 kg |
₹20/kg | 2 kg | 2 kg | 3 kg | 2 kg | 9 kg |
Graphs: For each person, plot price on the y-axis and quantity on the x-axis and join the points – each gives a downward-sloping individual demand curve. Plot the 'Total' column to get the market demand curve, which is flatter because it adds up everyone's demand.
Answer
Visit the nearby vegetable market and find answers
a. Who decides the prices of different vegetables in the vegetable market?
Answer
b. Sometimes the prices of a few vegetables are too high, and sometimes too low. Why is this?
Answer
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. No single person decides. Prices are set through the interaction of demand and supply – sellers start from what they paid at the wholesale mandi plus transport and profit, and then adjust through bargaining with buyers and according to how much stock is available and how many buyers come.
b. Supply changes with seasons, weather and transport. When a vegetable is in season and arrives in large quantities, prices fall; when heavy rain, drought or floods damage crops or block transport, supply falls and prices shoot up (as often happens with tomatoes and onions). Festivals and weddings also raise demand. Expectations and hoarding can also affect prices.
c. Yes. In the morning, tomatoes are fresh and demand is high, so prices are higher. Tomatoes are perishable, so by evening sellers want to clear the remaining stock before it spoils and fewer buyers are around; supply exceeds demand, so prices are lowered.
Categorise the following combinations into substitute goods and complementary goods: a. Movie ticket and popcorn b. Eraser and pencil c. Laptop and computer d. Air conditioner and cooler e. Notebook and pen f. Apple and banana g. Mobile and earphones
Answer
Substitute goods | Complementary goods |
|---|---|
c. Laptop and computer d. Air conditioner and cooler f. Apple and banana | a. Movie ticket and popcorn b. Eraser and pencil e. Notebook and pen g. Mobile and earphones |
Fig. 9.8 shows the demand curve DD' and supply curve SS'. Answer:
Answer
a. What does point E represent in this market?
b. What is the equilibrium price and equilibrium quantity at point E?
Answer
c. Point A lies on DD' and point B on SS' (upper dashed price line). What do A and B indicate, and what does the gap between them represent?
Answer
d. Point F lies on DD' and point C on SS' (lower dashed price line). What do F and C indicate, and what does the gap between C and F represent?
Answer
e. If the price stays at the lower dashed line, what could happen next in a free market?
Answer
a. Point E is the market equilibrium, where the demand curve intersects the supply curve, so quantity demanded equals quantity supplied and the market is cleared.
b. Reading from the graph, the equilibrium price is about ₹250 and the equilibrium quantity is 30 kg.
c. The upper dashed line is at ₹300, above equilibrium. Point A shows the quantity buyers demand at this price (about 24 kg) and point B shows the quantity sellers supply (about 37 kg). Since supply is more than demand, the gap AB represents excess supply (surplus), about 13 kg. Sellers will have to lower the price.
d. The lower dashed line is below equilibrium (about ₹160). Point C shows the quantity supplied (about 17–18 kg) and point F the quantity demanded (about 43 kg). Since demand is more than supply, the gap CF represents excess demand (shortage), about 25 kg.
e. In a free market, buyers would compete for the limited goods and sellers would raise prices. As the price rises, quantity demanded falls and quantity supplied rises, until the market returns to equilibrium E (about ₹250 and 30 kg). If the price is held at the lower level by force, the shortage would continue, with queues and possibly black-marketing.
(Quantities at A, B, C and F are approximate readings from the graph.)
Draw a market equilibrium graph using the schedule: Price (₹) 10, 20, 30, 40, 50; Q.D. (kg) 5, 10, 15, 20, 25; Q.S. (kg) 25, 20, 15, 10, 5.
Answer
a. Plot the demand and supply curves.
b. Identify the equilibrium price and quantity.
c. Analyse what happens if the price is set at ₹20 or ₹40.
Note: As printed, the Q.D. row rises with price and the Q.S. row falls with price, which is the opposite of the Laws of Demand and Supply. The two rows appear to be interchanged, so the answer below uses the corrected reading: Q.D. = 25, 20, 15, 10, 5 and Q.S. = 5, 10, 15, 20, 25 at prices ₹10 to ₹50.
a. Take quantity on the x-axis and price on the y-axis. Demand points: (25, ₹10), (20, ₹20), (15, ₹30), (10, ₹40), (5, ₹50) – a downward-sloping line. Supply points: (5, ₹10), (10, ₹20), (15, ₹30), (20, ₹40), (25, ₹50) – an upward-sloping line.
b. The curves intersect at ₹30 and 15 kg, where quantity demanded equals quantity supplied. (The equilibrium is the same either way the rows are read.)
c. At ₹20: quantity demanded is 20 kg but quantity supplied is only 10 kg, giving an excess demand (shortage) of 10 kg; the price will tend to rise towards ₹30.
At ₹40: quantity demanded is 10 kg but quantity supplied is 20 kg, giving an excess supply (surplus) of 10 kg; sellers will cut the price towards ₹30.
(If the table is read exactly as printed, the situations reverse – a surplus of 10 kg at ₹20 and a shortage of 10 kg at ₹40 – but that would contradict the Laws of Demand and Supply.)
Extra Important Questions
Multiple Choice Questions
1. The Law of Demand states that there is
(a) A direct relationship between price and quantity demanded (b) An inverse relationship between price and quantity demanded (c) No relationship between price and demand (d) A direct relationship between income and supply
Answer: (b) An inverse relationship between price and quantity demanded
2. Tea and coffee are examples of
(a) Complementary goods (b) Substitute goods (c) Public goods (d) Inferior goods
Answer: (b) Substitute goods
At the equilibrium price in Table 9.3, the quantity of mangoes demanded and supplied is:
Answer
(a) 6 kg (b) 8 kg (c) 12 kg (d) 38 kg
Answer: (c) 12 kg (at ₹100)
4. A minimum wage fixed by the government is an example of a
(a) Price ceiling (b) Price floor (c) Monopoly (d) Public good
Answer: (b) Price floor
During COVID-19, sanitisers were declared essential commodities under the:
Answer
(a) Consumer Protection Act (b) Essential Commodities Act, 1955 (c) RTI Act (d) Representation of the People Act
Answer: (b) Essential Commodities Act, 1955
Which regulator oversees the telecommunications sector in India?
Answer
(a) SEBI (b) RBI (c) TRAI (d) CCPA
Answer: (c) TRAI
Short Answer Questions
Distinguish between individual demand and market demand with an example from the chapter.
Answer
Individual demand is the quantity one consumer wants to buy at different prices, other factors constant – Srivalli buys 1 kg of mangoes at ₹150, 2 kg at ₹100 and 3 kg at ₹50. Market demand is the sum of all individual demands – with Alex and Israt, market demand is 6 kg at ₹150, 12 kg at ₹100 and 18 kg at ₹50.
State the Law of Supply. Why does the supply curve slope upward?
Answer
The Law of Supply states that as price increases, quantity supplied increases, and as price decreases, quantity supplied falls. The supply curve slopes upward because higher prices increase profitability, giving producers an incentive to increase output, and also attract new firms to the market.
What are public goods? Why are they usually provided by the government?
Answer
Public goods are goods and services available to all without anyone being excluded, and one person's use does not prevent others from using them – for example, roads, parks, streetlights, defence and drainage. Private companies usually do not provide them because they cannot earn direct profit; people tend to wait for others to pay (as in the neighbourhood park example), so the government must provide or fund them.
Answer
Why is a monopoly harmful to consumers?
In a monopoly, a single seller controls the entire supply of a product with no close substitutes. It can charge higher prices, supply less, offer poorer quality and restrict choice, which harms consumer welfare. The government regulates such practices to keep prices and supply in check.
Long Answer Questions
Explain the factors other than price that affect demand for a good.
(i) Price of related goods: If the price of a substitute (coffee) rises, demand for tea rises; if movie tickets become costlier, demand for the complementary good popcorn falls.
(ii) Income: Higher income generally increases demand and allows better-quality products.
(iii) Tastes and preferences: Srivalli prefers mangoes and will not switch to oranges even if they are cheaper.
(iv) Population size and composition: India's large population boosts demand; more children raise demand for sports shoes, and more elderly people for orthopaedic shoes.
(v) Seasonality: Books at the start of the session, sweets during festivals and sweaters in winter.
(vi) Future price expectations: People delay buying durables before Diwali expecting discounts, or buy immediately if they expect prices to rise.
Answer
"Market equilibrium in the real world is never stable." Explain with examples from the chapter.
Answer
(i) In theory, equilibrium is the intersection of demand and supply where the market clears, such as ₹100 and 12 kg for mangoes.
(ii) In reality, demand and supply keep changing due to technology, wages, interest rates, wars, political events, pandemics, weather and disasters, so the market is always adjusting to a new equilibrium.
(iii) Face masks (COVID-19, 2020): Demand surged, supply could not catch up, and prices rose; later suppliers increased production and prices fell; after the pandemic, demand dropped and prices returned to pre-pandemic levels.
(iv) Hotel tariffs in Goa: A room costs ₹1,500 on an off-season weekday, ₹8,000 on a tourist-season weekend and ₹25,000 on New Year's Eve, and may be cut by 40% overnight if a group cancels. Tariffs depend on booking speed, nearby hotels' prices, events, weather and days left before arrival.
These show that markets are dynamic systems, not machines with fixed equilibria.