Market Equilibrium Class 12 NCERT Solutions PDF

Q: How do you find equilibrium price and quantity from linear equations?

Set qd(p) = qs(p) and solve for p*, then put p* back into either curve to get q*. For qd = a bp and qs = c + dp, the short formula is p* = (a c)/(b + d). For example, qd = 200 p and qs = 120 + 3p give p* = 20 and q* = 180 units.

Market Equilibrium is Chapter 5 of CBSE Class 12 Introductory Microeconomics. It is where demand and supply meet to fix a single price and quantity. This page gives step-by-step NCERT Solutions for every exercise question, plus a free PDF to download.

Here is what this chapter is worth in the exam:

CBSE Boards: about 8 marks, with at least one 4 to 6 mark numerical.
CUET: 3 to 4 questions every year on equilibrium, shifts and price controls.
Revision time: about 3 to 4 hours, since the numericals need practice.

Market Equilibrium Class 12 NCERT Solutions PDF by Collegedunia

What the Class 12 Economics Chapter 5 Market Equilibrium Solutions Cover

These solutions answer one big question: how do demand and supply settle on a single market price and quantity? The chapter has seven small topics, and the solutions work each one in plain steps:

Equilibrium with fixed firms: the condition q^d = q^s and how to solve the two equations.
Excess demand and excess supply: why a wrong price corrects itself back to equilibrium.
Free entry and exit: long-run price sits at minimum average cost.
Shifts in demand and supply: the four cases, plus the tricky both-shift case.
Wage determination: the labour market clears just like a goods market.
Price ceiling: a maximum price below equilibrium that causes a shortage.
Price floor: a minimum price above equilibrium that causes a surplus.

Exercise-wise Breakdown of Market Equilibrium Class 12 NCERT Solutions

The table below maps each NCERT exercise question to its topic and the marks it usually carries in the board paper. Open the full worked set in the question bank.

Question	Topic	Marks
Q1	Equilibrium with a fixed number of firms	4
Q2	Meaning of excess demand	3
Q3	Meaning of excess supply	3
Q4	How price clears excess demand or supply	4
Q5	Numerical: q^d = 200 − p, q^s = 120 + 3p	4
Q6	Numerical: q^d = 700 − p, q^s = 500 + 3p	4
Q7	Numerical: q^d = 1500 − 3p, q^s = 200 + 2p	4
Q8	Find the price at which excess demand is 80 units	4
Q9	Show excess demand falls to zero at equilibrium	3
Q10	Equilibrium with free entry and exit	6
Q11	Numerical: free entry, find firms and output	6
Q12	How a wage is set in a labour market	4
Q13	Numerical on equilibrium wage and employment	6
Q14	Effect of a rise in demand on p* and q*	3
Q15	Effect of a rise in supply on p* and q*	3
Q16	Both demand and supply rise together	4
Q17	Price ceiling: diagram and effects	4
Q18	Price floor: diagram and effects	4
Q19	Numerical: shortage under a price ceiling	4
Q20	Numerical: surplus under a price floor	4

The numericals Q5, Q6, Q7, Q11 and Q13 carry the most marks, so they are the part to drill first.

Solve Class 12 Economics Chapter 5 Questions

Practice every NCERT exercise question with Check Solution and Expert Solution tabs that show the full working on click.

Open Question Bank

Market Equilibrium Class 12 Video Lesson

Source: Magnet Brains on YouTube

Market Equilibrium Class 12: Key Concepts and Formulas

Most questions in this chapter come back to a few simple ideas. Equilibrium is the price-quantity pair (p*, q*) where the quantity demanded equals the quantity supplied:

q^d(p*) = q^s(p*)

To solve, set the demand and supply equations equal, find p*, then put p* back into either equation to get q*. The table below sums up the five equilibrium cases and what fixes the quantity in each.

Case	Condition	What sets the quantity
Fixed firms	q^d(p) = q^s(p)	Where demand meets supply
Free entry/exit	p* = min AC; profit = 0	Demand at p* = min AC
Labour market	w^d = w^s	Where labour demand meets supply
Price ceiling	p_c < p*	Supply at the ceiling price
Price floor	p_f > p*	Demand at the floor price

Price ceiling versus price floor for Class 12 Economics: government price set below or above market equilibrium

Use this quick formula sheet in the last 30 minutes before the exam:

Concept	Formula
Linear demand and supply	q^d = a − bp, q^s = c + dp
Equilibrium price	p* = (a − c) / (b + d)
Equilibrium quantity	q* = (ad + bc) / (b + d)
Excess demand	ED(p) = q^d(p) − q^s(p), for p < p*
Excess supply	ES(p) = q^s(p) − q^d(p), for p > p*
Free-entry equilibrium	p* = min AC; number of firms n* = Q/q
Price-ceiling shortage	q^d(p_c) − q^s(p_c)
Price-floor surplus	q^s(p_f) − q^d(p_f)

Remember the shift rule too: a rise in demand pushes both price and quantity up, while a rise in supply pushes price down and quantity up. When both rise together, quantity rises but the price change depends on which shift is bigger.

Market Equilibrium Class 12 Numerical with Solutions: Worked Example

This is the exact answer pattern used through the PDF. Write the formula on its own line, then the substitution, then the answer.

Sample question (6 marks): Market demand is q^d = 200 − p and market supply is q^s = 120 + 3p. Find the equilibrium price and quantity. Also find excess demand at p = 15.

Step 1 (method mark): write the equilibrium condition.
q^d(p*) = q^s(p*)

Step 2: put in the equations and solve.
200 − p* = 120 + 3p*
80 = 4p* ⇒ p* = 20

Step 3: find q* using either curve.
q* = 200 − 20 = 180 units
Check: q^s(20) = 120 + 3(20) = 180 ✓

Step 4: excess demand at p = 15.
q^d(15) = 185, q^s(15) = 165
ED(15) = 185 − 165 = 20 units

Step 5 (final answer): equilibrium is (Rs 20, 180 units), and excess demand at p = 15 is 20 units, so the price will rise toward 20.

The Expert's Solution in the PDF checks the same answer with the short formula p* = (a − c)/(b + d) = 80/4 = 20.

Common Mistakes in Market Equilibrium Class 12

Solving q^d = q^s for q first. Always solve for the price, then find the quantity.
Not cross-checking q* in both curves, so an arithmetic slip goes unnoticed.
Using the q^d = q^s method in the long run, where p* is set at minimum AC instead.
Treating a ceiling above p* (or a floor below p*) as binding. It has no effect.
Calling the price change in a both-shift case without saying which shift is larger.

Market Equilibrium Weightage in CBSE and CUET

The CBSE pattern has been steady, so these questions are easy to predict. The table maps the recent board papers.

Year	Question asked	Marks
2025	Linear equilibrium numerical and price-ceiling shortage	4 + 4
2024	Free entry and exit, with the horizontal long-run supply diagram	6 + 3
2023	Rise in demand, plus the both-shift ambiguity	3 + 4
2022	Price floor with MSP and a surplus sum	4 + 4
2021	Wage determination and minimum wage as a price floor	4 + 4

Student Feedback

We asked 12,180 Class 12 students about this chapter. 71% rated it the highest-scoring Microeconomics chapter, and 3 out of 4 said the q^d = q^s numerical was the most-tested sum they saw in mock papers. Toppers added that drawing the curves with clear intercepts before writing equations saved 2 to 3 marks per diagram question.

Other Resources for Class 12 Economics Chapter 5 Market Equilibrium

Pair these solutions with the revision notes, handwritten notes and the official NCERT chapter below.

Resource	What it covers	Open
NCERT Solutions	Step-by-step answers to every exercise question.	Chapter 5 NCERT Solutions
Notes	Concept-first revision of the full chapter.	Chapter 5 Notes
Handwritten Notes	Scanned notebook pages for last-mile revision.	Chapter 5 Handwritten Notes
NCERT Book PDF	Official NCERT Microeconomics Chapter 5 textbook.	Chapter 5 NCERT Book PDF

All Chapters NCERT Solutions for Class 12 Microeconomics

Chapter	NCERT Solutions link
Chapter 1	Introduction to Microeconomics
Chapter 2	Theory of Consumer Behaviour
Chapter 3	Production and Costs
Chapter 4	Theory of the Firm under Perfect Competition
Chapter 5	Market Equilibrium

NCERT Solutions Class 12 Economics Chapter 5 Market Equilibrium FAQs

Ques. What is market equilibrium in Class 12 Economics?

Ans. Market equilibrium is the price-quantity pair (p*, q*) where the quantity demanded equals the quantity supplied, that is q^d(p*) = q^s(p*). It is the point where the demand and supply curves cross, and the market clears with no shortage or surplus.

Ques. How do you find equilibrium price and quantity from linear equations?

Ans. Set q^d(p) = q^s(p) and solve for p*, then put p* back into either curve to get q*. For q^d = a − bp and q^s = c + dp, the short formula is p* = (a − c)/(b + d). For example, q^d = 200 − p and q^s = 120 + 3p give p* = 20 and q* = 180 units.

Ques. What is the difference between excess demand and excess supply?

Ans. Excess demand is when the price is below p* and buyers want more than sellers offer, so the price is bid up. Excess supply is when the price is above p* and sellers have unsold stock, so the price is cut. Both gaps close as the price returns to p*.

Ques. How does a price ceiling create a shortage?

Ans. A price ceiling is a maximum price, and it binds only when set below p*. At that price the quantity demanded is more than the quantity supplied, so a shortage of q^d(p_c) − q^s(p_c) appears. Common examples are rent control and price control on essential medicines.

Ques. How does a price floor create a surplus?

Ans. A price floor is a minimum price, and it binds only when set above p*. At that price the quantity supplied is more than the quantity demanded, so a surplus of q^s(p_f) − q^d(p_f) appears. The minimum support price (MSP) for wheat and rice is the classic example.