2012 · Q66
Which one of the following expresses the relation between normal price and market price ?
Indian EconomyGrowth and sectors
- AMarket price is greater than normal price
- BMarket price is equal to normal price
- CMarket price tends to be equal to normal price
- DMarket price is lesser than normal price
Explanation
In Marshallian economics, the market price is the short-period price set by temporary demand–supply conditions, while the normal price is the long-period equilibrium price. The market price gravitates toward — tends to equal — the normal price as supply adjusts. It is not permanently above, equal to, or below it. Hence option C.