NCERT Solutions Class 9 Social Science Chapter 9 the Price Puzzle What Drives the Market

F R E E S T U D Y M AT E R I A L F O R E V E R Y S T U D E N T

CLASS 9 · SOCIAL SCIENCE

NCERT Solutions

Chapter 9: The Price Puzzle:
What Drives the Market

NCERT Textbook — Understanding Society: India And Beyond

BOOK PAGES SECTIONS QUESTIONS MEDIUM

195 – 213 15 44 English

Solutions, notes, sample papers & more at 69 pages

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

CLASS 9 · SOCIAL SCIENCE · UNDERSTANDING SOCIETY: INDIA AND BEYOND

NCERT Solutions — Chapter 9: The Price Puzzle: What
Drives the Market
Prices do not move at random. This chapter puts two forces behind every price tag — demand (what buyers
are willing and able to buy at each price) and supply (what sellers are willing and able to offer at each price) —
and shows how their meeting point, market equilibrium, is found, why it never stays still in the real world,
and where the government steps in.

TEXTBOOK BOOK PAGES

Understanding Society: India and Beyond (Class 195 – 213
9)

SECTIONS QUESTIONS

15 44

MEDIUM

English

The Big Questions — Page 195
Chapter opening

THE BIG QUESTIONS

Q1 What are the factors that influence the demand for and supply of goods and
services in a market?

Price is the first factor on both sides — but it works differently from all the others, and the
chapter is careful about the difference. A change in the good's own price moves a buyer or
seller along the existing curve. Every other factor changes how much people want to buy or sell
at the same price, so it shifts the whole curve. Getting this right is the whole skill of the chapter.

Page 1 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Own price changes → move ALONG the
curve Any other factor → the curve SHIFTS

D D₁

price falls

SAME price
more bought at the
Price

Price
quantity rises

D

Quantity Quantity

Left: only the price of mangoes changed, so Srivalli slides down her own curve. Right: her income rose
(or coffee got dearer, or the festival season began) — she now buys more at every price, so the curve
itself moves to D₁.

What influences demand. The chapter lists these in the section ‘Other Determinants of
Demand’ (pages 198–200).

Page 2 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

FACTOR HOW IT WORKS THE CHAPTER'S OWN EXAMPLE

Own price Price ↑ → quantity demanded ↓; price ↓ Srivalli buys 1 kg at ₹150 and 3 kg at ₹50
→ quantity demanded ↑ (Law of
Demand)

Price of substitutes If the substitute becomes dearer, Coffee gets expensive → people switch to
demand for this good rises tea; mangoes too costly → Srivalli buys
bananas

Price of If the good used with it becomes Costlier cinema tickets → less popcorn
complements dearer, demand for this good falls sold; more printers sold → more
cartridges

Income Higher income means people can A rise in income makes people “more
afford more, or choose better quality confident about their ability to spend”

Taste and A strong preference keeps demand up Srivalli will not replace mangoes with
preference even when a cheaper option exists oranges even though oranges are cheaper

Size and More people means more total More children → sports shoes; more
composition of demand; who they are decides what is working adults → formal shoes; more
population demanded elderly → orthopaedic shoes

Seasonality Demand shifts with weather, festivals Bookshops at the start of the session; sweet
and cultural habits, not price shops in the festive season; sweaters in
winter

Future price Expect a fall → postpone buying People delay buying durables before
expectations (demand now falls); expect a rise → Diwali, expecting festival discounts
buy now (demand now rises)

What influences supply. These come from the section ‘Other Determinants of Supply’ (pages
202–203) and the LET’S EXPLORE box on page 203.

Page 3 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

co m
m.
FACTOR HOW IT WORKS THE CHAPTER'S OWN EXAMPLE

m Price ↑ → quantity supplied ↑, because as e
Own price
.co profitability rises and new firms are kg at ₹150 a
g l
Seller A offers 1 kg at ₹50, 2 kg at ₹100, 3

se m
g l a attracted (Law of Supply)
a
Price of related Supply of one good depends on how Low wheat price and high chickpea price

m
.co ag
goods profitable the alternatives are for the seller → the farmer plants more chickpeas next

sem
season (Fig. 9.6)

Number of sellers
a gla
More sellers → market supply rises and Competition raises production, so supply
prices fall; fewer sellers → supply falls and can exceed demand
prices rise
co m
em.
m l as
.co
Technology Better technology lowers the cost of Drip irrigation and weather sensors raise

a g
m
production, so more can be produced and crop output; cold storage lets mangoes

l a se supplied reach distant markets

g
a Future Expect a demand boom → produce more; Potato wholesalers hold back stock now

a s
com
expect weak demand → cut production

agl
expectations to sell later at higher prices

m .
Input costs,
e
as reduce supply; a
Costlier inputs, resource depletion, bad Listed in the LET’S EXPLORE box on
weather, disasters
g l
a input raises it
weather or a disaster page 203
cheaper alternate

c o m
.
m buys more,
s e
Why the distinction matters: if the price of mangoes falls and Srivalli

. c om has not increased — she has simply moved down
her demand
a glathe same curve. Her
m
edemand
as needs something else to change: her income, her taste, the season, the price of
increases only when she is willing to buy more at the same ₹150, and that

a g l
bananas, or what she expects prices to do next.
se m
com g l a
m . a
ase
Q2 agl
How are prices of goods and services determined through demand and supply
interactions?

co m
m .
o m
l a se
.c price settles where the quantity buyers want to buy exactly
a g equals the quantity
m
se sellers want to sell. The chapter puts it as a negotiation: “Every market involves negotiation
The

a
agl c
.
between what buyers are willing to pay and what sellers are willing to accept.” Any other price
leaves one side disappointed, and their pressure moves the price.
s e m
m a
. co
The chapter's own mango numbers show it. Table 9.1 gives market demand and Table 9.2 gives
e m agl
l as
market supply at the same three prices:

a g

co m
m .
m ase
.co


a g l Page 4 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

PRICE MARKET MARKET WHICH IS WHAT HAPPENS TO THE
DEMAND Q D SUPPLY QS BIGGER PRICE

₹150 1+2+3 = 6 kg 3+7+8 = 18 kg QS > Q D — Mangoes are left unsold and will
surplus of 12 kg rot; sellers cut the price

₹100 2+4+6 = 12 kg 2+4+6 = 12 kg QS = Q D No pressure either way — this is
the equilibrium

₹50 3+6+9 = 18 kg 1+3+2 = 6 kg QD > Q S — Buyers compete for too few
shortage of 12 kg mangoes; the price is bid up

D S’
surplus 12 kg → price pushed down
Price of mangoes (₹)

150

E (12 kg, ₹100)
100

50
shortage 12 kg → price bid up D’
S

6 12 18
Quantity of mangoes (kg)

The market demand and market supply schedules of Tables 9.1 and 9.2 drawn together. Above ₹100
the surplus pushes the price down; below ₹100 the shortage pulls it up. Both arrows lead to E.

Page 5 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Why it happens: at ₹150 the sellers have brought 18 kg but buyers will take only 6
kg. Mangoes are perishable, so a seller left with unsold stock would rather cut the
price than throw the fruit away — and each cut brings in more buyers, because a
lower price moves buyers down along their demand curve. At ₹50 the opposite
happens: 18 kg is wanted and only 6 kg is on offer, so buyers outbid one another
and the higher price also draws sellers to offer more. The pressure stops only at
₹100, where the two quantities are equal at 12 kg.

Tip: notice that nobody fixes ₹100. It is not chosen by a seller or announced by an
officer — it emerges from thousands of small decisions by buyers and sellers. That is
what people mean when they say the market determines the price.

Q3 What is market equilibrium, and does it exist in the real world?

Market equilibrium is the point where the supply of goods and services equals demand, so
there is neither a surplus nor a shortage and prices tend to remain stable unless external
factors change. That is the chapter's own definition (page 203 margin). For the mango market
it is ₹100 and 12 kg — the point E where DMDM’ cuts SMSM’ in Fig. 9.7.

At ₹100: Quantity demanded = 12 kg

At ₹100: Quantity supplied = 12 kg

QS = QD → the market is ‘cleared’

Equilibrium price = ₹100 · Equilibrium quantity = 12 kg

And the honest answer to the second half is: not as a resting place. The chapter says so
plainly — “‘equilibrium’ in the real world is never stable and moves all the time, i.e., the market is
always in a process of adjusting to a new equilibrium, never fully settling at the previous one.”
Equilibrium is real as a direction markets move in, not as a place they stay.
The chapter gives two pieces of evidence.

Face masks in 2020. During the COVID-19 pandemic the demand for masks surged rapidly.
Supply could not catch up immediately, so prices rose significantly. Over time suppliers
adjusted to the higher demand and prices fell. Once the pandemic was over, demand
reduced further and prices returned to pre-pandemic levels. Three different equilibria in
about two years.

Page 6 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Hotel tariffs in Goa. A 100-room hotel charges ₹1,500 a night on an off-season Monday in
July, ₹8,000 on a Saturday in the December tourist season and ₹25,000 on New Year's Eve. If
a group tour cancels, the tariff may be cut by 40 per cent overnight to fill the rooms — that is
₹8,000 becoming ₹4,800, or ₹25,000 becoming ₹15,000.

40% of ₹8,000 = ₹3,200 → new tariff = ₹4,800

40% of ₹25,000 = ₹10,000 → new tariff = ₹15,000

Why does the target keep moving? Because the things that fix the two curves keep changing —
the chapter lists technology, wages, interest rates, wars, political events, pandemics, weather
and natural disasters. Every one of those shifts demand or supply, and a shifted curve means a
new intersection.

Why the idea is still worth learning: a compass is useful even though the
destination moves. Knowing where equilibrium lies tells you which way the price will
move next — if you can see a shortage, expect the price to rise; if you can see unsold
stock, expect a discount. That is exactly what the hotel's booking manager is doing
when the tariff changes several times in a single day.

Q4 How and why does the government intervene in the market?

Because a market allocates goods by willingness and ability to pay, and that is not always
a fair way to decide who gets an essential good. The chapter puts the test as a question:
“Suppose essential goods like medicines become very expensive, will they be accessible to all?”
India, it notes, is a market-based, regulated economy in which prices depend on demand and
supply — so the government does not replace the market, it corrects it where it fails.
The three reasons the chapter gives, and the tools used for each:

Page 7 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

WHY HOW THE THE CHAPTER'S EXAMPLE
INTERVENE GOVERNMENT DOES
IT

Unfair practices Price ceiling — a Maximum prices on essential medicines, to prevent
and unaffordable maximum price a seller overcharging; sanitisers declared essential commodities
essentials may charge under the Essential Commodities Act, 1955, with the
maximum retail price capped at ₹100 for a 200 ml bottle

Workers paid too Price floor — a lower A minimum wage, “to ensure workers earn enough for
little limit on a price or wage their hard work”

Monopoly power Keeping prices and A single or few dominant sellers can charge more, restrict
quantity supplied in supply and give poorer quality; RBI for banking, the
check; sector regulators Central Consumer Protection Authority for consumer
rights and unfair trade practices, TRAI for
telecommunications, SEBI for the securities market

Goods nobody will Provision of public Roads, bridges, public parks, streetlighting, national
supply privately goods — building or defence, sanitation and drainage — “usually not provided
funding them from public by private companies because they do not generate direct
money profit”

The public-goods reason is worth a moment, because the chapter explains it with arithmetic
rather than assertion. A neighbourhood park would benefit many families and could be built if
each family contributed ₹5,000. But each family reasons: “If others pay, the park will be built
anyway, and I can use it without paying.” If enough families think that, not enough money is
collected and the park is never built — even though everyone wants it. The good fails not
because it is unwanted but because nobody can be excluded from using it once it exists.
The chapter is equally clear that intervention has limits (page 208). Excessive intervention
can:

Distort prices and cut producer incentives. If the government fixes wheat at ₹20 per kg
when the market price is ₹30, the farmer loses ₹10 on every kilogram — production falls and
shortages follow.
Create compliance burdens. A small restaurant may need clearances for food safety, fire
safety, pollution control and local permissions; the time and cost can discourage small
entrepreneurs.
Discourage innovation. Farmers who cannot earn adequate returns will not invest in better
seeds, irrigation or technology, which lowers long-term productivity.

Why both halves matter: the chapter's position is not that intervention is good or
bad but that it is a tool with a cost. Regulations “are required when markets are
inefficient” and “must be implemented carefully.” A good answer in the examination
holds both of those together instead of arguing one side.

Page 8 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

co m
m.
In-text Questions — Page 195
m as e
.co
The chapter's opening paragraph
a g l
se m
l a
IN-TEXT

a g
What happens if the mangoes your parents bought last week are now half the
m
Q1
price?
. co ag
e m
g l as
a
Your family will almost certainly buy more of them — and that is the Law of Demand in

co m
m.
one sentence. The chapter's own example is exactly this: at ₹150 per kg Srivalli bought 1 kg, at

m
₹100 she bought 2 kg, and at ₹50 she bought 3 kg.
as e
.co a g l
a s emweek: ₹150 per kg → bought 1 kg
gl
Last
a This week: price halved to ₹75 per kg
m a s
.co agl
Quantity demanded rises — the same money now buys more

se m
g l a
On the graph: you slide down along the demand curve DD’
a
m
Two separate things are happening, and it is worth keeping them apart. Your family's
. co
m
demand has not changed — the whole schedule of what you would buy at each price is the

as e
com l
same as last week. What changed is the price, so you have moved to a different point on that
same.schedule. a g
a s em
agl Why the price halved in the first place: almost always because supply rose. As the

se m
comprices fall.” More mangoes arriving in the a
chapter says, “At the start of mango season, supply is low, making mangoes costly.
Mid-season, the supply increases .and
a g l
a s emhas not changed leaves sellers with unsold,
l falls until the extra fruit is cleared.
market at a time when demand
agprice
perishable stock, and the

co m
m .
o m a se in the evening?
Why are vegetables expensive in the morning but are lcheaper
.c ag
Q2

a s em
agl ANSWER
.c
Because the seller's position changes completely between morning and evening, while the
s e m
om a
. c agl
vegetables get less valuable by the hour. The same stock is worth more to a buyer in the

a s em by closing time, so the price falls through the day.
morning and worth less to the seller

agl

co m
m .
m ase
.co


a g l Page 9 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

MORNING EVENING

Demand High — buyers want the freshest produce Lower — most households have already bought
and are willing to pay for it for the day

Supply The seller has the whole day ahead and Unsold stock will wilt or rot overnight; waiting
position can wait for a good price costs more than cutting the price

Result Price is held up Price is cut to clear the stock

Why it happens: vegetables are perishable, so an unsold tomato at closing time is
worth close to nothing. Any price above zero is better than throwing it away. The
seller therefore keeps lowering the price until the remaining quantity is taken —
which is precisely the surplus-clears-by-price-fall mechanism of the chapter,
compressed into a single day.

Check it yourself: question 9(c) of the end-of-chapter set asks the same thing about
tomatoes. The answer also explains why a shop selling non-perishable goods —
steel vessels, notebooks — does not cut prices every evening.

Q3 Or why does the price of onions seem to change every few months?

Because the demand for onions stays roughly steady all year while the supply arrives in
bursts. A curve that barely moves and a curve that swings a great deal give an intersection
point that keeps jumping.
The chapter names the forces at work in the ‘Other Determinants of Supply’ section and in the
LET’S EXPLORE box on page 203:

Seasonality of the harvest. Fresh arrivals push market supply up and the price down;
between harvests supply comes only from storage and the price rises.
Weather and disasters. Unseasonal rain or a failed crop cuts supply — “change in weather,
disaster” is on the chapter's own list.
The farmer's earlier choice. If prices were poor last season, some farmers planted
something else instead — the chapter's wheat-and-chickpea example in Fig. 9.6 — so this
season's supply is smaller.
Expectations and hoarding. If wholesalers expect prices to rise, “they might hold back
supply now to sell later at higher prices”, which raises the price today.

Page 10 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Why demand hardly helps: onions go into everyday cooking, so households buy
nearly the same quantity whether the price is low or high. When buyers cannot
easily cut back, a small fall in supply forces a large rise in price before the market
clears — which is why onion prices make news in a way that, say, ice-cream prices do
not.

Q4 Why does the same flight seat cost ₹3,000 on one day but ₹9,000 on another day?

Because the supply of seats on that flight is fixed while the demand for them changes
every day — so the whole adjustment has to come out of the price. This is the airline version
of the hotel example on page 205, and the chapter's list of tariff factors transfers almost word
for word.

Seats on the aircraft = fixed (supply cannot rise for tomorrow's flight)

Demand on a holiday / festival weekend = high → ₹9,000

Demand on an ordinary weekday = low → ₹3,000

Ratio = 9,000 ÷ 3,000 = 3 times

The chapter's own list of what such prices depend on fits exactly: how fast seats are getting
booked, what nearby competitors are charging, festivals or conferences in the area, weather,
the number of days left before travel, and past booking trends.

Why the airline does it: an empty seat earns nothing once the aircraft has taken off
— the revenue from it is lost forever. So the airline raises the price when it can see
the flight filling fast, and drops it when seats are going unsold, changing the price
many times to earn the maximum revenue (the chapter's margin term: the total
money earned from sales before expenses are deducted).

Q5 Why do shops and malls announce discounts at certain times of the year?

Because a lower price sells a far larger quantity, and at particular times of the year that
trade is worth making. A discount is a deliberate move down the demand curve, made when
the seller values clearing stock more than the margin on each item.

Page 11 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

The reasons cluster into three:

The season brings the buyers. The chapter's seasonality point — festive shopping, the start
of an academic session, the change of weather — means many more people are in the
market anyway. A discount at that moment converts a crowd into sales.
Old stock must go. End-of-season clothes and last year's phone model lose value once the
new stock arrives. Selling at a reduced price is better than holding goods that will be worth
still less.
Buyers are waiting for it. The chapter notes that “people delay buying durables before
Diwali or the New Year, expecting festival discounts.” Once buyers expect a sale, present
demand falls until the sale actually arrives — so shops must hold one.

Why the shop still gains: profit depends on price times quantity, not price alone. If a
shirt priced at ₹1,000 sells 100 pieces, and at ₹600 it sells 400, the sales value goes
from ₹1,00,000 to ₹2,40,000. Add the shelf space freed for new stock and the new
customers who come for the sale and stay, and the discount can be the better
decision — which is why it is announced, not forced.

DON'T MISS OUT — Page 198

Page 12 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Section: Demand — market demand curve

DON'T MISS OUT

Q1 Did you notice that the market demand curve is flatter than Srivalli's individual
demand curve? Why is that?

Individual demand curve (Srivalli) Market demand curve (all buyers)

Y Y
D Dm
A
150 150
Price of mangoes (₹)

B
100 100

C
50 50

D’ Dm’
X X
1 2 3 6 12 18
Quantity of mangoes (kg) Quantity of mangoes (kg)

The two curves the question compares, redrawn from the book: Srivalli’s individual
demand curve DD’ (Fig. 9.2 (b), page 196 — A at 1 kg/₹150, B at 2 kg/₹100, C at 3 kg/₹50)
and the market demand curve DmDm’ (Fig. 9.3 (b), page 197 — 6 kg, 12 kg and 18 kg at
the same three prices). The two panels use different quantity scales, exactly as the book
prints them.

Because the same fall in price is answered by one buyer in Srivalli's curve and by three
buyers in the market curve — so the market curve has to stretch six times as far sideways
for the same drop downwards. The chapter's own numbers make it exact.

Price falls ₹150 → ₹50, a fall of ₹100 in both cases

Srivalli's quantity: 1 kg → 3 kg, a rise of 2 kg

Market quantity: 6 kg → 18 kg, a rise of 12 kg

Steepness of Srivalli's curve = ₹100 ÷ 2 kg = ₹50 per extra kg

Steepness of the market curve = ₹100 ÷ 12 kg = ₹8.33 per extra kg

Page 13 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

A curve that needs only ₹8.33 of price fall to sell one more kilogram lies much closer to the
co m
horizontal than one that needs ₹50. That is what ‘flatter’ means.
e m.
m l as
m .co a g
l a se
a g

co m
. ag
150
em
g l as
a
Price of mangoes (₹)

co m
m.
100

m as e
.co a g l
se m
g l a
a 50
Srivalli DD’
m Market DmDm’
a s
em
.co agl
+2 kg
l a s +12 kg

ag
1 3 6 18
co m
Quantity of mangoes (kg)
m .
m ase
.co a g l
Both curves are drawn on the same scale from Tables 9.1. The same ₹100 fall in price buys 2 extra

s e mkilograms from Srivalli but 12 extra kilograms from the whole market, so the market line leans far
agla closer to the horizontal.

se m
om
Why it happens: market demand c“aggregates g l a
. many consumers, so the same price
a
em response.” Every buyer adds their own
change creates a larger totalsquantity
a
gl Srivalli's +2 kg, Alex's +4 kg and Israt's +6 kg add to +12
reaction to the price falla—
kg — and the more buyers there are, the further right the curve reaches for each

co m
.
rupee the price drops.

se m
o m l a
m ag position. The market curve
.cTip: ‘flatter’ is a statement about the slope, not about the
l a se
ag is not a different kind of curve — it slopes downward for exactly the same reason. It

.c
m
is simply the horizontal sum of the individual curves, so it is longer sideways at every

m a s e
co agl
price.

m .
ase
a g l
THINK ABOUT IT — Page 199
co m
m .
m ase
.co


a g l Page 14 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Section: Other Determinants of Demand

THINK ABOUT IT

Q1 What happens when you consume the first mango? It tastes delicious, right? The
second one is good? The third one and so on? You are barely interested in eating
mangoes by this point. Why do you think this happens?

Because the extra satisfaction you get from each additional mango is smaller than from
the one before — the principle of diminishing marginal utility. The mango has not changed;
your hunger for it has.

1st mango → utility very high (you were hungry for it)

2nd mango → still good, but less than the first

3rd mango → only mildly enjoyable

4th mango → almost no extra satisfaction

Additional utility falls as more of the same good is consumed

And this is exactly why the demand curve slopes downward, which is the reason the box is
placed in this section. If the fourth mango gives you far less satisfaction than the first, you will
not pay the same price for it. As the chapter puts it: “As the utility derived from a successive
quantity of products falls, the willingness to pay for the products also decreases, so demand
falls.”
Look again at Srivalli's schedule with this in mind:

KILOGRAM HIGHEST PRICE SHE WILL PAY WHY
FOR IT

1st kg ₹150 The first mangoes of the season — worth a
lot to her

2nd kg ₹100 Welcome, but she already has mangoes at
home

3rd kg ₹50 Only worth buying if they are cheap

Page 15 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Why it must be so: if every extra unit gave the same satisfaction as the first, a
person would keep buying the good forever at any price, and demand curves would
be flat lines. The falling satisfaction is what makes a buyer say “only at a lower price”
— and that sentence, repeated by every buyer, is the downward-sloping demand
curve.

Try this: the principle is not about mangoes. Try it with glasses of water on a hot
afternoon, or with a second and third helping of a favourite dish. The first is
precious, the fourth is a burden — and you would not pay the same for both.

LET'S EXPLORE — Page 200
Section: Other Determinants of Demand — future price expectations

LET'S EXPLORE

Q1 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?

Method. Fix a set of prices for one notebook — say ₹120, ₹90, ₹60, ₹30 and ₹10 — and against
each write, honestly, how many notebooks you would buy in a school year at that price and no
other. Keep everything else constant: the same pocket money, the same number of subjects, the
same quality of notebook. Then plot price on the y-axis and quantity on the x-axis and join the
points.
What a good answer must contain: (i) quantity rising as price falls, never the reverse; (ii) a
price at which you buy the most — usually the lowest price on your list; (iii) a price at which your
quantity falls to zero, or to the bare minimum your school demands; and (iv) reasons drawn
from the chapter — purchasing power, diminishing marginal utility, and substitutes.
Sample answer:

Page 16 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

PRICE OF ONE NUMBER I WOULD MY REASON
NOTEBOOK BUY IN A YEAR

₹120 2 Only for the two subjects that need a thick
notebook; I would reuse old ones for the rest

₹90 4 Enough for the main subjects

₹60 7 One for every subject

₹30 10 One per subject plus rough work and a diary

₹10 14 I would keep spares and share with my cousin

I buy the most at ₹10 — the lowest price on my list

I would stop buying altogether at about ₹200 — my whole month's pocket money for one

notebook

Fall in price ₹120 → ₹10 = ₹110 · Rise in quantity 2 → 14 = 12 notebooks

The three reasons behind the pattern, in the chapter's own terms:

Purchasing power. My pocket money is fixed, so at ₹120 each I simply cannot afford many;
at ₹10 the same money stretches much further.
Diminishing marginal utility. The first notebook is essential, the twelfth is a spare I may
never open — so I will only take it if it is very cheap.
Substitutes. Above about ₹200 I would use loose sheets in a file, or write on both sides of
old notebooks. When a substitute becomes relatively cheaper, demand shifts to it — exactly
as the chapter says of tea and coffee.

Check it yourself: if your table shows quantity rising as price rises, something else
has crept in — usually a change in your income or in what you need. A demand
schedule holds everything except price constant.

Q2 Ask your family members if they postponed or advanced buying any product
because of future expectations of changes in price?

Method. Ask two or three family members one clear question: “Was there something you
deliberately bought earlier than you needed to, or waited longer to buy, only because of what
you expected the price to do?” For each answer, note four things — the product, whether they

Page 17 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

advanced or postponed, what they expected the price to do, and what actually happened. Do
not count purchases delayed for lack of money; that is a change in purchasing power, not in
expectations.
What a good answer must contain: at least one case of each kind (postponed and advanced),
the expectation that caused it, and the link back to the chapter's rule — “If consumers expect
prices to fall, they postpone purchases, decreasing present demand. If they expect prices to rise,
they buy immediately, increasing present demand.”
Sample answer:

FAMILY PRODUCT WHAT THEY DID THE EXPECTATION BEHIND IT
MEMBER

My father A washing Postponed from He expected festival discounts — the
machine September to the chapter's own example of delaying
Diwali sale durables before Diwali

My mother Cooking oil Advanced — bought a Neighbours said prices would rise after the
and pulses larger tin in one go rains damaged the crop

My elder sister A mobile Postponed by two A new model was about to be launched,
phone months which usually brings the older model's
price down

What the exercise shows: demand today is shaped by beliefs about tomorrow.
Nothing about the washing machine changed in September — not its price, not the
family's income — yet the family's demand for it in September was zero, because
they expected a better price in November. This is one of the clearest cases of a
determinant that shifts the whole demand curve without the current price moving at
all.

Did you know? Sellers behave the same way. Page 203 gives the mirror image:
potato wholesalers who expect prices to rise “might hold back supply now to sell
later at higher prices.” When both sides act on the same expectation, the
expectation can bring about the very price rise people were expecting.

LET'S EXPLORE — Page 203

Page 18 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Section: Other Determinants of Supply
co m
e m.
m as
LET'S EXPLORE

.co a g l
a s em happens to the supply of a product in case of a change in the cost of inputs,
gl
What
a
Q1
discovery of an alternate input, depletion of resources, change in weather, disaster,
etc.? Discuss in class using examples of diverse goods and services.

co m
m . ag
l a se
Every one of these changes whataagseller is willing to offer at the same price — so each one
shifts the whole supply curve, left or right, rather than moving the seller along it. That is

co m
m.
the single idea the box is testing, and it applies to a farm, a factory and a service alike.

m as e
.co a g l
m
CHANGE EFFECT ON WHY EXAMPLE TO DISCUSS

l a se SUPPLY

g
a Cost of inputs Supply falls Each unit now costs more to Costlier diesel raises transport

a s
comproducing
make, so at the old price fewer costs for a vegetable trader;

agl
rises (curve shifts

.
units are worth costlier steel for a cycle factory

em becomes more
left)

l a s
agprofitable
Cost of inputs Supply rises Production Cheaper electricity for a flour
falls (curve shifts at every price mill

m
right)

. co
An alternate Supply rises A cheaper or more easily
m
sefor paper; jute or paper
Using bagasse instead of

com l a
. production — the same effect as agsubstituted for plastic in
input is available input lowers the cost of
wood

m
ase
discovered

agl
better technology packaging

Resources are Supply falls, The raw material itself is running Falling groundwater in a
se m
depleted and keeps
com
out, so no price can call forth the farming belt; overfished
g l a
. a
sem
falling old quantity waters yielding smaller

gla
catches

Weather
a
Supply falls or Output of anything grown or Unseasonal rain damaging the
transported depends directly on
co m
onion crop; a good monsoon
changes rises
weather
m .
raising the paddy harvest

m l a sAeflood cutting a highway so
.co
m strikes
A disaster Supply falls Production and the roads,
ag
s e
la
sharply storage and workers that carry mangoes cannot reach a

ag
goods are all disrupted at once distant market

.c
s e m
m a
co agl
What happens next, in every case: demand has not changed, so the shifted supply curve cuts
the same demand curve at a new point.
m .
as e
a g l

co m
m .
m as e
.co


a g l Page 19 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Supply falls → at the old price, QD > QS → shortage → price is bid up

Supply rises → at the old price, QS > QD → surplus → price is pushed down

Services work the same way. If a hospital's cost of imported equipment rises, or a bus
operator's fuel bill goes up, the number of services offered at the old fare or fee falls. If a new
software tool lets a coaching centre teach more students with the same teachers, the supply of
classes rises.

Why this is not the Law of Supply: the Law of Supply says a higher price brings a
larger quantity supplied. Here the price has not moved at all — the cost, the input,
the resource or the weather has. Confusing the two is the commonest error in this
chapter: a price change moves you along the supply curve; everything in this table
moves the supply curve itself.

LET'S ANALYSE — Page 204

Page 20 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Section: Market Equilibrium

LET'S ANALYSE

Q1 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.

PRICE QUANTITY QUANTITY QUANTITY OUTCOME
(₹) DEMANDED SUPPLIED (QS) SUPPLIED AND
(QD) OF OF MANGOES QUANTITY
MANGOES (IN (IN KG) DEMANDED
KG)

40 38 6 Qs < Qd Excess
Demand

100 12 12 Qs = Qd Market
Equilibrium

150 8 43 Qs > Qd Excess
Supply

Equilibrium Price = ₹ 100 Equilibrium Quantity = 12 kg

Table 9.3, page 203, reproduced as printed.

Start by setting the table out as three pairs of points, then read the gap at each price.
Table 9.3 gives:

PRICE (₹) Q D (KG) Q S (KG) GAP OUTCOME

40 38 6 38 − 6 = 32 kg short Qs < Qd → Excess Demand

100 12 12 12 − 12 = 0 Qs = Qd → Market Equilibrium

150 8 43 43 − 8 = 35 kg extra Qs > Qd → Excess Supply

Equilibrium price = ₹100 and equilibrium quantity = 12 kg, exactly as the table's last row
states.

Page 21 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

D (demand) S (supply)
150
Excess supply at ₹150 = 35 kg
Price of mangoes (₹)

price falls
E (12 kg, ₹100)
100

price rises

40
Excess demand at ₹40 = 32 kg

6 12 38 43
Quantity of mangoes (kg)

Table 9.3 plotted. The purple bar at ₹40 is the 32 kg shortage; the red bar at ₹150 is the 35 kg surplus.
Both gaps close as the price moves towards E.

How equilibrium is reached in each scenario.

At ₹40 — a shortage of 32 kg. Thirty-eight kilograms are wanted and only six are on offer.
Buyers who cannot get mangoes offer more than ₹40; sellers, seeing they can sell everything
instantly, raise the price. As the price rises, two things happen together — some buyers drop
out (a movement up along the demand curve, from 38 kg towards 12 kg) and sellers bring
more to market (a movement up along the supply curve, from 6 kg towards 12 kg). The gap
narrows from both ends and closes at ₹100.
At ₹150 — a surplus of 35 kg. Forty-three kilograms have been brought but only eight are
wanted. The unsold fruit will spoil, so sellers cut the price. Now the falling price brings
buyers back (down along the demand curve, from 8 kg towards 12 kg) and discourages
sellers (down along the supply curve, from 43 kg towards 12 kg). The surplus disappears at
₹100.
At ₹100 — no gap. Everyone who is willing to pay ₹100 gets mangoes and everyone willing
to sell at ₹100 sells them. Nobody has a reason to change the price, so it stays — the market
is ‘cleared’.

Page 22 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Why the adjustment always works in the same direction: a shortage puts the
pressure on buyers, who compete by offering more, and a surplus puts the pressure
on sellers, who compete by asking less. In both cases the price moves towards the
one level at which neither side is left disappointed.

Tip while plotting: the three demand points and the three supply points in Table 9.3
do not fall on perfectly straight lines, so join them as smooth lines through the
plotted points rather than forcing a ruler through them. What matters is that D
slopes downward, S slopes upward, and they cross at (12 kg, ₹100).

THINK ABOUT IT — Page 205
Section: Does Market Equilibrium Exist in the Real World?

THINK ABOUT IT

Q1 Can you think of another real-life example (other than hotels) where prices change
frequently? Explain why the prices keep changing.

Method. Pick something whose price you can actually watch change — then explain it using the
chapter's two curves rather than by saying “because of demand and supply”. For each example
ask three questions: is the supply fixed or slow to change? does demand swing from day to
day or hour to hour? and does the good lose value if it is not sold? Wherever the answer to all
three is yes, prices will change frequently.
What a good answer must contain: one clear example, the specific reason its supply cannot
adjust quickly, the specific reason its demand keeps moving, and what happens to the
equilibrium as a result.
Sample answer: tomatoes in the local vegetable market. The price of tomatoes in my market
changed three times in a fortnight — from about the price of a normal week, to nearly double
after two days of heavy rain, and then down again when fresh trucks arrived.

Page 23 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

co m
m.
QUESTION TOMATOES

m l a se
.co mandi today. Rain on the road or a damaged crop cuts it at a
g
Is supply fixed or slow? Yes — a crop takes months to grow, so today's supply is whatever has arrived in the

se m once and nothing can

g l a
a
replace it

Does demand swing? Yes — households buy more before festivals and weddings, less in the middle of the

co m
. ag
month

e m
Does the good lose
g l as
Yes — tomatoes rot in a day or two, so sellers must clear stock at whatever price it takes
value if unsold?
a

c o m
.
Other examples that pass the same test: air tickets and train tatkal fares (the number of seats
is fixed and the demand for a particular date keeps changing), cab fares at rush
s e m hour and in the
. c
rain, gold and omshare prices, cinema tickets that cost more on a Saturday
a g lathan a Tuesday, and
prices m
a s e on e-commerce apps that change several times a day.

agl Why prices, and not quantities, do the adjusting: when supply cannot be
m a s
c o agl
increased today — no more tomatoes, no more seats on tonight's flight — the whole
.
adjustment has to happen throughmprice. That is why the goods with the most fixed
l a sethe most jumpy prices.
ag
supply are exactly the goods with

. com
Our choices today affect future resources. For example, high e
s m for fast
m a
demand
o gl future supply. So, should
Q2

. cfashion, a
em we focus only on short-term gains, or also think about long-term sustainability?
overfishing and overuse of groundwater can harm

l a s
ag How could this affect the market equilibrium?

se m
com g l a
. a

m
gl ase
A market that looks at today's price alone can be in perfect equilibrium and still be

a
destroying the supply it will need tomorrow — which is why the long-term view has to be
added deliberately. Today's equilibrium reflects today's demand and today's supply. It carries
no information about whether the resource behind that supply will still exist in twenty years.
co m
m .
Trace the chapter's three examples through the two curves.
m as e
.co a g l
se m
g l a
a c
m .
m a s e
e m . co agl
g l as
a

co m
m .
m as e
.co


a g l Page 24 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

TODAY WHAT IT DOES TO THE WHAT HAPPENS TO FUTURE
RESOURCE EQUILIBRIUM

Fast fashion — very high Heavy use of water, dyes and Costlier inputs and scarcer water raise the
demand for cheap clothes, land for waste; cotton land and cost of production, so the supply curve
worn briefly and discarded water are diverted from other shifts left: price higher, quantity lower
uses

Overfishing — catching The breeding stock itself shrinks Future supply falls whatever the price, so
faster than fish can breed — this is the ‘depletion of fish become expensive and fishing
resources’ from page 203 communities lose their livelihood

Overuse of groundwater — The water table falls; wells must Irrigation costs rise, farm output falls, and
pumping more than the rain be dug deeper each year food prices rise — a leftward shift in the
replaces supply of many crops at once

S today

E today
Price

E future

S in future (resource depleted) D

Quantity

Using up the resource that supply depends on pushes the supply curve left. With demand
unchanged, the new equilibrium sits at a higher price and a smaller quantity — people get less,
and pay more for it.

So the answer is: both, but with the long term deciding the limits. Short-term gains are not
wrong in themselves — they are how a fisherman feeds his family this month and how a firm
stays in business. The problem is that no single buyer or seller has any reason to hold back,

Page 25 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

because the cost of the extra fish caught or the extra water pumped falls on everybody later. It is
the same reasoning as the neighbourhood park on page 207, turned upside down: there,
nobody would pay for a shared benefit; here, nobody counts a shared cost.

What this implies for the market: equilibrium tells you the price at which today's
market clears. It does not tell you whether that price is right for the future, because
the future's costs are not in today's supply curve. That gap between the two is
exactly why the chapter turns next to the role of government.

Try this: ask what would change if the future cost were included — deeper wells
priced into the cost of water, or the cost of restocking a fishery counted in the cost of
fish. Supply would be smaller and prices higher today, and the resource would last
longer. Comparing the two outcomes is the whole sustainability argument in one
diagram.

THINK ABOUT IT — Page 206
Section: Regulation of Unfair Practices

THINK ABOUT IT

Q1 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.

Method. Look for a price that is printed or notified rather than bargained — a fare chart at a bus
stand, the maximum retail price on a medicine strip, a notified minimum wage, a ration-shop
rate. For each, ask two questions: is this a maximum (a price ceiling, protecting buyers) or a
minimum (a price floor, protecting sellers or workers)? And who would be hurt if the price were
left entirely to the market?
What a good answer must contain: one specific example you have actually seen, whether it is
a ceiling or a floor, and the welfare reason behind it in the chapter's terms — that markets
allocate by willingness and ability to pay, so essentials can become inaccessible to those with
less purchasing power.
Sample answer. On every medicine strip at our chemist's shop there is a printed maximum
retail price, and the shopkeeper cannot charge more than that even when a medicine is in short
supply. This is a price ceiling. It was done because a person who is ill has almost no choice —
they cannot postpone the purchase or switch to a substitute the way they could with tea and

Page 26 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

coffee — so without a cap a seller could charge a great deal during a shortage. The chapter
gives exactly this case: “the government sets maximum prices (price ceiling) for essential goods
like medicines to prevent overcharging.”
The clearest example the chapter itself records is the sanitiser cap of 2020. Demand surged,
stocks ran out, prices rose sharply, and some shopkeepers began hoarding and black-
marketing. The government declared sanitisers essential commodities under the Essential
Commodities Act, 1955 and capped the maximum retail price at ₹100 for a 200 ml bottle.
Meanwhile many companies started production and sanitisers soon became widely available at
fair prices.

EXAMPLE CEILING OR WHO IT WHY
FLOOR PROTECTS

Maximum retail price Ceiling Patients Essential and cannot be postponed; buyers
on medicines have no bargaining power when ill

Maximum retail price Ceiling All consumers A sudden surge in demand had produced
on sanitisers, 2020 stockouts, hoarding and black-marketing

Minimum wage Floor Workers “To ensure workers earn enough for their
hard work”; a floor works only if set above
the equilibrium wage

Notified bus fares Ceiling Daily Public transport is a necessity for people
commuters who have no alternative, and on many
routes there are few operators

Why the government acts here and not everywhere: the chapter's test is fairness
in allocation, “particularly to ensure the welfare of vulnerable and low-income
groups”. Where a good is essential, cannot be postponed, has no close substitute, or
is sold by very few sellers, the market's own answer may be one that leaves poorer
households out altogether. Where none of those conditions holds — mangoes,
notebooks, cinema tickets — the price is left to demand and supply.

In-text Questions — Page 206

Page 27 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Section: Role of Government in the Economy

IN-TEXT

Q1 Suppose essential goods like medicines become very expensive, will they be
accessible to all?

No — and the reason is built into the definition of demand itself. Demand, the chapter
insists, “is not just the desire to buy something; it is the willingness complemented by the ability
or purchasing power to buy it.” A market therefore hands the good to whoever is willing and
able to pay, and a household without the ability to pay simply does not appear in the market
demand at all.

Market allocates by → willingness AND ability to pay

A poor household's need for medicine → real, and urgent

Its ability to pay a very high price → absent

So its need never becomes demand, and the medicine goes elsewhere

Why medicines are the hard case. With mangoes, a high price is a mild disappointment —
Srivalli buys bananas instead. With medicine there is usually no substitute, the purchase cannot
be postponed until the price falls, and the buyer is in no position to bargain. Every escape route
that keeps an ordinary market fair is closed.

What follows from the answer: this is precisely why the chapter says “fairness and
equity in allocation are required, particularly to ensure the welfare of vulnerable and
low-income groups”, and why the government's first listed tool is a price ceiling on
essential goods like medicines. The question is not rhetorical — it is the argument
for the whole section that follows it.

Q2 Do you remember some regulators from the Grade 7 Social Science textbook
chapter ‘Understanding Markets’?

A regulator is a body set up by the government to watch over one sector of the market
and keep it fair and transparent. This chapter names four, and they are the ones to recall first:

Page 28 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

co m
m.
REGULATOR THE SECTOR IT OVERSEES

m ase
.co
Reserve Bank of India (RBI) Banking
a g l
se m
g l a
a
Central Consumer Protection Authority Violation of consumer rights and unfair trade practices

Telecom Regulatory Authority of India (TRAI) The telecommunications sector

. cTheomsecurities market ag
se
Securities and Exchange Board of India (SEBI)
m
l a
ag to the Grade 7 chapter ‘Understanding Markets’ and look
Method for the recall part. Turn back
for the section on how buyers are protected — that is where regulators and consumer rights

. c om
were introduced. List each body you find, and against it write the one sentence that says what it

m a s
protects and from what. Then compare with the four above: you will find the em
same idea in both

. co is the point the box is making.
classes, which
a gl
a s em
agl Why regulators exist at all: the government does not fix the price of a phone plan
s
or a bank loan. What it does is make sure the market for them works honestly —
om a
. c agl
that charges are disclosed, that a single dominant seller cannot restrict supply or

a s em who is cheated has somewhere to complain.
push up prices, and that a consumer

a l produce is transparency.
The chapter's word for whatgthey

co m
m .
m OUT — Page 207 as e
DON'T MISS
. co a g l
s e m
Section: Regulation of Unfair Practices — the sanitiser price cap
a
agl DON'T MISS OUT
se m
com g l a
. a
em
Q1 How do such price controls affect suppliers and consumers?

a s
ANSWER agl
A price cap protects consumers from being overcharged, but it also cuts what a supplier
co m
earns per unit — so its effect depends entirely on whether supply can grow while the cap
m .
m as e
.co l
is on. The sanitiser case in the box is worth reading closely, because it shows both halves.
a g
se m
g l a
a c
m .
m a s e
e m . co agl
g l as
a

co m
m .
m as e
.co


a g l Page 29 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

CONSUMERS SUPPLIERS

Immediate Pay no more than ₹100 for a 200 ml bottle; Earn less per bottle than the
effect protected from hoarders and black-marketeers shortage price they could have
charged

Risk if supply A shortage: at the capped price more is wanted than Weaker incentive to produce;
cannot grow is offered, so there are queues, rationing by the some may divert stock to the
shopkeeper, or an illegal market at a higher price black market instead

What actually Sanitisers “soon became widely available at fair “Many companies started
happened in prices” production” — new firms entered
2020 and total supply rose sharply

Why it worked in this case: a price ceiling holds the price below equilibrium, which
by itself creates excess demand. The shortage disappeared here not because of the
cap but because supply moved: sanitiser was cheap and quick to make, so new
producers entered within weeks and the whole supply curve shifted right. Where
entry is slow or costly — a new medicine, a new power plant — the same cap would
leave the shortage in place. The lesson is that a ceiling manages the price, and only
new supply fixes the quantity.

Tip: compare this with the chapter's own warning on page 208 — wheat capped at
₹20 when the market price is ₹30 leaves farmers ₹10 short on each kilogram, “which
may lead to reduced production and shortages”. Same tool, opposite result, because
supply could not expand.

Q2 While in this case the price control was for an emergency, do you think such
controls should be in practice forever?

The case for a permanent cap and the case against it both rest on evidence in this chapter,
and a good answer weighs them rather than picking a side by instinct.

Page 30 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

THE CASE FOR KEEPING CONTROLS THE CASE AGAINST KEEPING THEM PERMANENTLY

Essentials — medicines, basic food — cannot be A price held below equilibrium leaves producers earning less
postponed, so buyers have no bargaining power than the market would pay, so output falls and shortages appear
and can be overcharged (the wheat example, ₹20 against ₹30)

Markets allocate by ability to pay; a cap keeps Weak returns mean no investment in “better seeds, irrigation, or
essentials within reach of low-income technology” — quality and long-run output suffer
households

Where a few sellers dominate, competition Persistent shortages invite exactly the hoarding and black-
cannot be relied on to hold prices down marketing the control was meant to stop

A reasoned position. A price control is best understood as an emergency brake rather than an
engine. It is well suited to a sudden shock — a pandemic, a disaster, a sharp shortage of one
essential good — where the price is rising faster than supply can possibly respond and people
would be harmed in the meantime. Kept in place permanently, it fights the market instead of
correcting it: producers withdraw, supply shrinks, and the shortage becomes the normal state.
What that suggests in practice, using only the chapter's own reasoning:

Apply controls to genuinely essential goods, where there is no substitute and the purchase
cannot be delayed.
Review them regularly, so a control introduced for an emergency does not simply continue
by habit.
Pair a cap with measures that let supply grow — as happened when many companies began
making sanitisers — since only more supply removes a shortage.
Prefer regulation of unfair practices — through bodies like the CCPA — where the real
problem is cheating or a dominant seller rather than the price level itself.

Why the chapter frames it this way: its own summing-up is that regulations “are
required when markets are inefficient” but “must be implemented carefully, as
excessive government intervention can have adverse effects.” The question is not
whether to control prices but when, for how long, and on what.

LET'S EXPLORE — Page 207

Page 31 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Section: Provision of Public Goods

LET'S EXPLORE

Q1 From your surroundings, list two goods or services that are provided by the
government (for example: roads, streetlights, parks, police, and so on.).

Method. Walk from your home to your school and note everything you use on the way that
nobody charged you for at the point of use. Then apply the chapter's test to each: is it available
to everyone in the area, and would a private company be able to earn a direct profit from it? If
the answers are yes and no, it is a public good in the chapter's sense.
What a good answer must contain: two items you can actually point to, not a general list
copied from the book, and one line each on who provides them.
Sample answer:

GOOD OR SERVICE WHO WHAT IT DOES
PROVIDES IT

The street lights on our The municipal Light the road after dark for everyone who passes —
road body residents, shopkeepers, visitors

The government primary The State Basic treatment and vaccination for families in the
health centre government surrounding villages

Others that pass the same test in most neighbourhoods: the tar road itself, the drainage line,
the police station, the public park, the government school, the fire service and the panchayat's
drinking-water supply. The chapter's own list is roads, bridges, public parks, streetlighting,
national defence, sanitation and drainage systems.

Tip: a government office is not the same as a public good. What makes something a
public good in this chapter is that it benefits all citizens and that private companies
“do not provide it because it does not generate direct profit”.

Q2 Who does benefit from it?

Everyone who is present, whether or not they paid anything towards it — and that is the
defining feature.
Sample answer, taking the street lights on our road.

Page 32 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

WHO BENEFITS HOW

Every household on the road Can move about safely after dark; fewer thefts and accidents

Shopkeepers Can keep shops open into the evening, so they earn more

Students and workers returning late A lit road is safer, especially for girls and elderly people

People simply passing through Get the same benefit although they live elsewhere and pay nothing here

Buses, autorickshaws, cyclists Can see the road, so travel is safer for everyone using it

Why the answer is “everyone”: once the lamp is switched on, nobody can be kept
out of its light, and one person walking under it does not leave less light for the next.
That is exactly why a private firm cannot sell street light by the unit — it has no way
of charging the person who benefits.

Q3 Why would it be difficult for a private company to provide this service on its own?

Because the company would have no way of collecting money from the people who use it
— the same reason the chapter's neighbourhood park is never built.
Follow the chapter's own arithmetic with street lights instead of a park. Suppose lighting our
road needs ₹5,000 from each of the families living on it. Every family reasons: “If the others pay,
the lights will come on anyway, and I can walk under them without paying.” If enough families
reason that way, not enough money is collected and the lights are never installed, even
though every family wants them.

Benefit → available to everyone on the road, payer or not

Payment → each family's own money, and voluntary

Best move for one family → let the others pay

If everyone plays that move → total collected is too little, and nothing is built

Three practical obstacles for the private company:

It cannot exclude non-payers. There is no gate on a road and no meter on a lamp post, so
a family that refuses to pay still gets the light.
There is no direct profit. The chapter's own phrase — such goods “are usually not provided
by private companies because they do not generate direct profit”.

Page 33 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

The cost is large and lumpy. Poles, wiring and maintenance must be paid for in full before a
co m
single person benefits, and the benefit is then spread thinly over hundreds of people.
e m.
m l as
.co a g
s em
Why government provision solves it: the government does not depend on
a
gl
avoluntary contributions. It funds the good out of taxes that everyone pays, so the ‘let
the others pay’ move is no longer available — and the good that everybody wanted

co m
ag
actually gets built.

m .
as e
a g l
Imagine the government stops providing this good or service, what problems might
m
Q4

co
m.
people in your area face?

m as e
.co a g l
m

l a se
g
The good would not simply become costlier — for most people it would disappear, because
a there is no market that could supply it.
m
Sample answer: if the street lights on our road were switched off for good.
a s
.co
mWHO IS HIT HARDEST agl
PROBLEM
l a se
a g
Accidents and falls on an unlit road, especially Elderly people, small children, cyclists

om
in the monsoon

. c
s e mreturning from school
m a
Theft and unsafe streets after dark Everyone, but especially girls and women

. co agl
or work
m
seShops shutting earlier, so earnings fall
l a
ag
Small shopkeepers and vendors

Evening classes, tuition and games given up Students
se m
com g l a
m . Poorer households, who cannot afford them, are left in the dark a
ase
Some households buying their own lamps and

agl
generators while richer ones manage

The last row is the important one. If a shared service is withdrawn, what replaces it is a

. c om
private, unequal version — the families who can pay light their own gate, and the rest of the

m a s em to secure is “social
road stays dark. The chapter's phrase for what public provision is meant

.
welfare, l
co economic development, and equal access to essentialagservices”, and it is the equal

as emaccess that goes first.
agl c
m .
Why this is an economic argument and not only a moral one: an unlit road
s e
. c om
makes shops close early, keeps workers at home after dark and slows the movement
a g la
s
of goods. The loss is spread e macross everyone's income, not just their comfort —
a
agl files public goods under the government's economic role.
which is why the chapter

co m
m .
m as e
.co


a g l Page 34 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

LET'S RECALL — Page 208
Section: Limitations of Government Intervention

LET'S RECALL

Q1 According to you, how should a democratic government decide when and how
much it should intervene in markets to protect people's welfare?

By testing each case rather than applying a single rule — because this chapter shows the
same tool producing opposite results in different markets. A useful way to answer is to set
out the tests a government could apply, drawing on the two sides the chapter itself lays out.

TEST THE QUESTION TO ASK WHERE THE CHAPTER SHOWS
IT

Is the market Is an essential good beyond people's The three reasons the chapter gives for
failing? reach, is a public good going unprovided, intervention
or does a monopoly control supply?

Who is being Are “vulnerable and low-income groups” Fairness and equity in allocation, page
harmed? being priced out, or are workers being 206
paid too little?

Is the remedy Would a lighter measure work — better Regulators such as CCPA and TRAI
proportionate? information, a complaint body, more ensure transparency without setting
competition — before fixing a price? prices

What does it cost Will producers stop supplying, will small The three limitations on page 208
the other side? firms drown in compliance, will innovation
stop?

Is it reviewed? Is the measure re-examined once the The sanitiser cap was an emergency
emergency passes, using evidence of measure, and the box asks whether
what it actually did? such controls should last forever

And ‘how much’ follows from ‘when’. The chapter's own examples suggest a ladder: first make
the market work honestly (regulate unfair practices, ensure transparency); then, if that is not
enough, act on quantity and access (provide the good publicly, encourage new sellers to enter);
and only where people would be harmed in the meantime, act directly on price with a ceiling or
a floor. The heaviest tool is used last and reviewed first.

Page 35 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Why this belongs with democracy: as the ‘Democracy’ chapter established, a
democratic government is accountable to the people and is expected to act in their
interest. Accountability is what makes the ladder workable — the decision has to be
explained, its results can be questioned in the legislature and the press, and a
measure that is hurting more than it helps can be changed. In an unaccountable
system a bad control simply stays.

Q2 Whose voices should a democratic government consider while making such
decisions—consumers, producers, workers, or others? Why?

All of them, because each group sees only one part of the picture and the chapter shows
that acting on one group's view alone produces the very failures it warns about.

VOICE WHAT ONLY THEY CAN TELL THE WHAT HAPPENS IF THEY ARE
GOVERNMENT IGNORED

Consumers Whether an essential good is actually Prices drift beyond the reach of low-
affordable and available where they live; income households; monopoly
whether they are being overcharged or practices go unnoticed
sold poor quality

Producers What it truly costs to make and supply the A price is fixed below cost — the
good, and at what price they would stop wheat at ₹20 against a market price
supplying of ₹30 — production falls and
shortages follow

Workers Whether wages are enough to live on, and The price floor that a minimum
whether conditions are safe wage is meant to be gets set too low
to protect anyone

Small businesses and How heavy the licences, permits and The small restaurant with four
new entrants compliance procedures really are separate clearances gives up; ease of
doing business falls and fewer sellers
enter

Others — the Whether the benefit is reaching those with Groundwater, fisheries and forests
poorest, remote the least purchasing power, and what the are used up because nobody in the
areas, future decision does to resources that must last room spoke for the future
generations

Why hearing all of them is not just fair but necessary. A market has two sides by definition. A
decision informed only by consumers protects the price but destroys the supply; a decision
informed only by producers protects the supply but abandons the people who cannot pay. The

Page 36 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

chapter's warning about excessive intervention and its argument for intervention are both true
— and only by listening to both sides can a government tell which case it is looking at.

How a democracy actually gathers these voices: through elected representatives
who must return to the people, through debate in legislatures, through
consultations before a rule is notified, through regulators like the Central Consumer
Protection Authority that take complaints directly, and through a free press that
reports shortages and overcharging. The point is not that everyone gets what they
want, but that a decision has to be defended publicly to people who are affected by
it — which is what accountability means.

Before we move on… — Page 209
The chapter's recap points, with the evidence behind each

BEFORE WE MOVE ON …

Q1 Demand is the quantity consumers are willing and able to buy at different prices.
The Law of Demand shows an inverse relationship, that is, as price falls, quantity
demanded rises. Demand is influenced by income, prices of substitutes and
complements, tastes, seasonality, future expectations, and population.

Three separate claims are packed into this point, and each is anchored in something the
chapter showed.
1. Willing and able. The word “able” is doing real work. Demand “is not just the desire to buy
something; it is the willingness complemented by the ability or purchasing power to buy it.” A
person who badly wants a medicine but cannot pay for it does not add to demand at all —
which is exactly why the chapter later argues for government action on essentials.
2. The inverse relationship. Srivalli's schedule is the proof:

₹150 → 1 kg · ₹100 → 2 kg · ₹50 → 3 kg

Price down by ₹50 each time → quantity up by 1 kg each time

Joining points A, B and C gives the downward-sloping line DD’

And the reason behind it is on page 199: each extra mango gives less additional satisfaction
than the last, so the buyer will take more only at a lower price.
3. The other influences — and what makes them different.

Page 37 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

INFLUENCE DIRECTION THE CHAPTER'S EXAMPLE

Income Up → demand up, or a shift to Higher household income makes people “more
better quality confident about their ability to spend”

Price of a substitute Up → demand for this good up Coffee dearer → more tea

Price of a complement Up → demand for this good Costlier cinema tickets → less popcorn
down

Taste and preference Holds demand up despite Srivalli will not swap mangoes for cheaper
cheaper options oranges

Seasonality Shifts demand by time of year Bookshops at session start, sweets in the
festive season, sweaters in winter

Future expectations Expect a fall → buy later; Durables delayed before Diwali
expect a rise → buy now

Population size and Changes both the size and the More children → sports shoes; more elderly →
composition kind of demand orthopaedic shoes

Why the list is kept separate from the price: the price change moves you along
one fixed curve. Every item in this table changes what you would buy at the same
price, and therefore moves the curve itself. Keeping the two apart is the difference
between a correct answer and a muddled one.

Q2 Supply is the quantity sellers are willing and able to offer at different prices. The
Law of Supply shows a direct relationship—as price rises, quantity supplied
increases. Supply depends on prices, related goods' prices, the number of sellers,
technology, input costs, and other factors such as weather.

Supply is the mirror image of demand, but the reason behind its slope is different — and
worth stating properly. Demand slopes down because each extra unit is worth less to the
buyer. Supply slopes up for two reasons the chapter gives together: “higher prices increase
profitability, incentivising producers to increase output, and also attract new firms to the
market.”

Page 38 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

co m
m.
Seller A: ₹50 → 1 kg · ₹100 → 2 kg · ₹150 → 3 kg
m as e
.co
Market (A+B+C): ₹50 → 1+3+2 = 6 kg
a g l
se m
l a
₹100 → 2+4+6 = 12 kg · ₹150 → 3+7+8 = 18 kg
g
aHigher price, larger quantity → an upward-sloping supply curve

. c om ag
s em
The determinants, and which way each pushes:
a
a g l
DETERMINANT EFFECT ON SUPPLY THE CHAPTER'S EXAMPLE

. c om
Low wheat price, high chickpea price →

em (Fig. 9.6)
Price of related More profitable alternative → less of

m a s
the farmer plants chickpeas
goods this good

. c o l
agraises
s e mof sellers Competition production so supply
a
Number More sellers → more supply, prices fall;

agl
fewer sellers → less supply, prices rise can exceed demand

s
Technology Better technology → lower cost → more Drip irrigation, weather sensors, cold
m a
.co agl
supplied storage for distant markets

se m
Input costs
g l a
Costlier inputs → less supplied Listed in the LET’S EXPLORE box on page
a 203

Weather and Can cut supply sharply and without
co m
Change in weather, disaster, depletion of

m .
se
disasters warning resources

m l a
m .co ag
Potato wholesalers waiting for the peak

se
Future expectations Expect higher prices → hold stock back

l a
now season

ag
se m
m a
Why the two laws pull against each other: a higher price makes buyers want less
o
.c they respond in opposite directions, there is ag l
m
and sellers want to offer more. Because

l a
exactly one price at which the setwo quantities agree — and that is what makes an
g
equilibrium possible ataall.

co m
m .
m a e
sequals
.c
Q3 o ag l
Market equilibrium occurs when the quantity demanded quantity supplied.

a s em Fundamental markets constantly adjust toward a new equilibrium as conditions

agl change—weather, trends, technology, income, and so on, create dynamic pricing

.c
m
conditions.

m a s e
e m . co agl
g l as
a
The recap point has two halves — a definition and a warning not to take it too literally —
and both matter.

com
m .
m as e
.co


a g l Page 39 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

The definition, with the chapter's numbers. At ₹100 the quantity demanded (12 kg) equals
the quantity supplied (12 kg). There is no pressure for the price to change and the market is
‘cleared’: no shortage and no surplus. On Fig. 9.7 this is point E, where DMDM’ cuts SMSM’.

Below ₹100 → Qd > Qs → excess demand (shortage) → price bid up

Above ₹100 → Qs > Qd → excess supply (surplus) → price pushed down

At ₹100 → Qs = Qd = 12 kg → the price stays

The warning. “In theory, equilibrium is an intersection point between demand and supply. But
in the real world, markets are dynamic with constantly changing conditions.” The chapter names
what keeps moving the curves — technology, wages, interest rates, wars, political events,
pandemics, weather and natural disasters — and concludes that equilibrium “is never stable
and moves all the time”.
The evidence it offers:

Masks, 2020. Demand surged; supply could not catch up; prices rose sharply; suppliers
adjusted and prices fell; after the pandemic demand fell further and prices returned to pre-
pandemic levels.
A Goa hotel. ₹1,500 on an off-season Monday, ₹8,000 on a December Saturday, ₹25,000 on
New Year's Eve — and a 40 per cent cut overnight if a group booking is cancelled. The tariff
depends on how fast rooms are booking, nearby hotels' rates, local events, the weather
forecast, days left before arrival and past booking trends.

Why ‘never settling’ is not the same as ‘useless’: the market is always moving
towards an equilibrium even when it never arrives. That is why the idea still predicts
the direction of the next price change — see a shortage and expect a rise, see unsold
stock and expect a discount — which is precisely how a hotel's booking manager or a
vegetable seller decides what to charge next.

Q4 Government intervenes when markets fail and produce unfair outcomes
(unaffordable essentials), under-provide public goods, and enable monopolies.
However, excessive government regulations may also have adverse effects.

This point names three specific failures and then refuses to treat the remedy as free —
which is the balance the whole section is built on.

Page 40 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

THE FAILURE WHY THE MARKET CANNOT FIX IT THE GOVERNMENT'S TOOL
BY ITSELF

Unaffordable Markets allocate by willingness and ability Price ceiling on essentials such as
essentials to pay, so a household without medicines; the ₹100 cap on 200 ml of
purchasing power is simply left out sanitiser under the Essential Commodities
Act, 1955

Under-provided Nobody can be excluded from a lit street Public provision or funding — roads,
public goods or a park, so each family waits for the bridges, parks, streetlighting, defence,
others to pay and the ₹5,000 sanitation, drainage
contributions are never collected

Monopoly A single or few dominant sellers can Keeping prices and quantity supplied in
charge more, restrict supply and give check; regulators — RBI, CCPA, TRAI,
poorer quality, and buyers have nowhere SEBI — for transparency
else to go

Workers paid Where many workers compete for few A minimum wage — a price floor, effective
too little jobs, the wage they accept may be below only if set above the equilibrium wage
what they can live on

And the second sentence is not an afterthought. The chapter devotes a full section to it:

Price distortions and reduced producer incentives — wheat fixed at ₹20 while the market
sets ₹30 leaves the farmer ₹10 short on every kilogram, “which may lead to reduced
production and shortages”.
Compliance burdens — a small restaurant needing food-safety, fire-safety, pollution-control
and local clearances; the time and cost can discourage small entrepreneurs from starting or
expanding.
Discourages innovation and entrepreneurship — farmers who cannot earn adequate
returns “won't invest in better seeds, irrigation, or technology”, which reduces long-term
productivity and output.

Why both halves have to be held together: the chapter's own formula is that
regulations are “required when markets are inefficient” but “must be implemented
carefully”. An answer that only lists reasons to intervene, or only lists the harms of
intervening, has read half the section. India is described as a market-based,
regulated economy precisely because it uses both — prices set by demand and
supply, with the government correcting the places where that fails.

Questions and activities — Pages 210–213

Page 41 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

End-of-chapter exercise

QUESTIONS AND ACTIVITIES

Q1 An increase in income always leads to a rise in demand for goods. Defend or refute,
giving reasons for the same.

Refute the statement — the word that makes it wrong is “always”. The chapter's own
wording is deliberately careful: “A rise in income generally makes people feel more confident
about their ability to spend, so the quantity demanded for several goods rises, even if prices
remain the same.” Generally and several are not always and all.
What is true. A rise in income does raise purchasing power, and for most goods a family will
then buy more at the same price. Note what kind of change this is:

Price of the good → unchanged

Income → higher, so more is bought at that same price

On the graph: the whole demand curve shifts to the right, from D to D₁

This is not a movement along the curve — no price moved

D D₁ (higher income)

more bought at the same price
Price

same price

Quantity demanded

Page 42 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

A rise in income moves the whole curve to D₁. The price never changed — which is why this is a shift,
not a movement along the curve.

Why “always” fails — three reasons drawn from the chapter.

REASON WHAT HAPPENS EXAMPLE

People move up to Higher income lets consumers “choose A family that starts buying packaged
better quality higher-quality products”, so demand for milk may buy less loose milk; one that
the cheaper version they were using falls buys a scooter may stop buying bus
tickets

Taste and If someone does not want a good, extra Srivalli will not buy oranges however
preference decide, income does not make them want it cheap they are, or however much she
not money earns

Wants are The additional utility from more of the A household with more income does not
satisfied at some same good falls, so demand stops rising eat five times as much salt or rice
point even as income keeps growing

The precise statement: a rise in income raises the demand for most goods, and
raises it most for goods people want more of as they grow better off. For a good that
people abandon in favour of a better substitute, higher income lowers demand. So
the correct claim is “generally leads to a rise in demand”, not “always”.

Q2 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

Start from the one relationship the whole question turns on: petrol and a petrol car are
complementary goods — you cannot use one without the other. So when petrol doubles,
the cost of running a petrol car doubles, and the demand for petrol cars falls. Everything else
follows from that.

Page 43 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

co m
m.
RELATIONSHIP WHAT WHY

as e
com
HAPPENS TO

.
DEMAND
a g l
a s em
gl
acars
(a) Diesel Substitute for a
petrol car
Rises Running a petrol car has become far costlier,
so buyers switch to the alternative that has
not become costlier — exactly the tea-and-

co m coffee logic of page 198
e m . ag
(b) Electric Substitute for a
g l as
Rises An electric car runs on electricity, so doubling
cars petrol car a petrol makes it relatively cheaper to run. The
rise may take longer than for diesel cars,

co m
since buyers also need charging facilities

se m.
com cars l a
ag less, so seat covers, floor
(c) Car Complementary to Falls Fewer petrol cars are bought and those on
.
em
accessories the road are driven

a s
agl
mats, music systems and other accessories
are needed less — the chapter's cinema-
ticket-and-popcorn case

m a s
(d) Public Substitute for private Rises
m .co Buses, metros and shared autos become the
agl
transport car travel
l a se cheaper way to make the same trip, so more

a g people use them

co m
Price of a good ↑ → demand for its substitute ↑
m .
m as e
.co
Price of a good ↑ → demand for its complement ↓
a g l
s m petrol ↑↑ → petrol cars ↓ → accessories ↓ · diesel cars ↑ · electric cars ↑ · public
eHere:
gl a
a
m
transport ↑

a se
. com a g l
m
ase
agl
Why none of these is a movement along a curve: the price of a diesel car has not
changed, nor has the bus fare. What changed is the price of a related good. So each
of these demand curves shifts — the diesel car, electric car and bus curves to the

co m
right, the accessories curve to the left — while the price on their own axis stays
m .
m
where it was.
ase
.co a g l
se m
g l a
a
Tip: the trap in part (c) is to think “accessories are not petrol, so nothing happens”.
.c
m
Trace the chain: petrol → petrol cars → things used with cars. A complement of a

m a s e
co agl
complement is affected too, which is why the chapter's printer-and-cartridge

m .
e
example is worth remembering.

g l as
a

co m
m .
m as e
.co


a g l Page 44 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Q3 A farmer traditionally irrigates fields manually (labour-intensive). He installs drip
irrigation (a technology upgrade) that reduces water use by 40 per cent and
increases yield by 30 per cent. How does this affect (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 of production falls — and it falls twice over. He uses 40 per cent less water, so
that part of his cost drops directly. And the same field now yields 30 per cent more, so whatever
he does spend is spread over more kilograms.

Suppose the field earlier produced 100 kg at a total cost C

Cost per kg before = C ÷ 100

After drip irrigation, yield rises 30% → 130 kg from the same field

Even if total cost stayed at C: cost per kg = C ÷ 130

(C ÷ 130) ÷ (C ÷ 100) = 100 ÷ 130 = 0.77 → cost per kg falls by about 23%

And total cost does not stay at C — the water bill falls by 40%

So the true fall in cost per kg is larger still

This is the chapter's own point about technology: “Improvement in technology reduces the cost
of production, allowing producers to produce more and supply more.” Drip irrigation is named
in the book itself.
(b) He is willing to supply more at every price — his supply curve shifts to the right.
Cheaper production means a price that was barely worth accepting before is now comfortably
profitable. Say he was willing to sell 100 kg at ₹20 a kg; with his lower cost per kilogram he
would supply that 100 kg at a lower price, and at ₹20 he would now offer 130 kg.

Why this is a shift and not a movement: the price on his axis has not changed at
all. What changed is his cost. The Law of Supply — more supplied at a higher price —
still applies to the new curve; the new curve simply sits to the right of the old one at
every price.

(c) If many farmers adopt it, market supply rises sharply and the equilibrium moves — to
a lower price and a larger quantity. Market supply is the sum of individual supplies, so if most
sellers each offer 30 per cent more, the market supply curve S shifts right to S₁.

Page 45 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

S S₁

E
Price

price ↓
E₁

D

quantity ↑
Quantity

When many farmers adopt the technology, supply shifts from S to S₁. With demand unchanged, the
market clears at a lower price and a larger quantity.

Step by step: at the old price the extra output creates a surplus; unsold crop pushes the price
down; the lower price brings in more buyers (a movement down along D) and discourages the
least efficient sellers (a movement down along S₁); the market settles at E₁.

Did you know? The individual farmer and the group of farmers can face opposite
outcomes. The first farmer to adopt drip irrigation sells more at the old price and
gains. Once everyone adopts it, the price falls — so each farmer's gain depends on
whether the extra quantity makes up for the lower price. Consumers, meanwhile,
gain either way, and 40 per cent less water is used for the same land.

Page 46 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Q4 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.

Sellers cut prices during festival sales because a much larger quantity sold at a smaller
margin can earn more than a small quantity sold at a large one — and the festival season
is exactly when that trade pays off.
Why sellers do it — four reasons from the chapter's own concepts.

Seasonality has already raised demand. The festive season is on the chapter's list of
demand determinants: “customers flocking to sweet shops during the festive season”. Many
more buyers are in the market at that moment, so a discount reaches far more people than
the same discount in June.
Buyers are waiting for it. “People delay buying durables before Diwali or the New Year,
expecting festival discounts.” Once buyers postpone, present demand falls — and the only
way to bring it back is to hold the sale they are waiting for.
Old stock must be cleared. Last season's clothes and last year's phone model lose value
once new stock arrives, so selling them cheaply is better than holding them.
Many sellers compete on one platform. The chapter notes that more sellers mean higher
competition and lower prices; on an online marketplace a buyer can compare prices in
seconds, so no seller can hold out.

A shirt at ₹1,000 sells 100 pieces → sales value = ₹1,00,000

The same shirt at ₹600 sells 400 pieces → sales value = ₹2,40,000
Lower price, but far higher revenue — the money earned before expenses

What happens to the equilibrium — and this needs care, because two different things are
often confused.

READING WHAT IT MEANS RESULT

Price simply Nothing else changes; the price is Quantity demanded rises above quantity supplied
pushed below just cut → an excess demand: goods go “out of stock”,
equilibrium orders are capped, delivery is delayed. This is
what a shortage looks like online

The sale as sellers Sellers stock up heavily and more Both curves move right, and the market clears at
actually plan it sellers join, so more is offered at a much larger quantity and a lower price than
every price; the festive season usual — a genuine new equilibrium
also raises demand

Page 47 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Why the second reading is the realistic one: a festival sale is not an accident.
Warehouses are filled weeks in advance precisely so that the larger quantity
demanded can be met at the lower price. Where a seller misjudges it, the first
reading takes over and you see the tell-tale sign of a shortage — “sold out in 3
minutes”.

Does it benefit only consumers? No — both sides gain, in different ways.

CONSUMERS GAIN SELLERS GAIN

Buy at a lower price, so the same money buys more — Sell a far larger quantity, so total revenue can rise
purchasing power effectively rises even at a lower price per unit

Can afford goods that were out of reach at the normal price Old and slow-moving stock is cleared before it loses
more value

More sellers competing means more choice and better terms New customers try the platform or brand and may
return at full price later

But not every seller gains equally. A seller with a thin margin, or one who must match a large
competitor's discount to stay visible, may sell more and still earn less. That is the same warning
the chapter gives about the number of sellers: more competition brings the price down, and the
sellers who cannot bear the lower price are the ones who leave the market.

Q5 Suppose the government sets a maximum sale price for an essential vaccine below
the market-driven price. What is likely to happen? Choose from the options below
and elucidate your point. a. Surplus b. Shortage c. No effect d. Fall in demand

The answer is (b) Shortage. A maximum price fixed below the market price is a price ceiling —
“an imposed price control that sets the maximum amount a seller can charge”. Below
equilibrium, buyers want more than sellers are willing to supply, and the gap is excess demand.

At the equilibrium price → Qd = Qs

Ceiling fixed below that price:
quantity demanded rises (buyers move down along D)

quantity supplied falls (sellers move down along S)

Qd > Qs → excess demand = a shortage

Page 48 of 69

as e
a g
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market l AglaSem · NCERT Solutions

co m
e m.
m l as
m .co a g
l a se
g
S
a

co m
ag
Price of the vaccine

m .
as e
a g l
E — market price

co m
seprice) m.
m Price ceiling (maximum legal
gl a
m .co a
l a se Qs Qd
a g D
SHORTAGE (excess demand)
m a s
m .co agl
l a se
a g Doses

m
A ceiling below the equilibrium price. Buyers want Qd doses; sellers offer only Qs; the purple bar is
the shortage the control creates.
. co
se m
o m
c shortage looks like in practice: vaccination centres arun l a
g out of stock, waiting lists
What.that
m
se queues appear, doses have to be rationed by rule rather than by price, and — as the
g l aand
a chapter records for sanitisers in 2020 — some sellers may resort to hoarding and black
marketing, selling illegally above the cap.
se m
com g l a
. a
em
Why the other three options are wrong:

a s
OPTION
agl THE ANSWER
WHY IT IS NOT

(a) Surplus
co m
A surplus needs the price to be held above equilibrium, where sellers offer more than buyers

m .
e
want — that is what a price floor does. Here the price is held below

m l as
m .co
(c) No effect
a g
A ceiling has no effect only if it is set above the market price, so that the market never reaches it.

l a se The question says it is set below, so it binds

ag
.c
m
(d) Fall in Demand does not fall — the quantity demanded rises, because the vaccine is now cheaper. And

m a s e
agl
demand note the wording: the demand curve has not shifted at all, since nothing but the price changed

. co
e m
g l as
a

co m
m .
m as e
.co


a g l Page 49 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Why a government might still do it: the shortage is a real cost, but so is the
alternative — an essential vaccine priced beyond the reach of poorer households,
allocated purely by ability to pay. The chapter's balanced position is that the control
must be paired with something that raises supply, as happened with sanitisers when
“many companies started production, and sanitisers soon became widely available at
fair prices”. A ceiling alone manages the price; only new supply removes the
shortage.

Q6 The government levies higher taxes on products such as tobacco and alcohol to
promote healthier choices among citizens. Can you find out other goods where
price controls have been set in place? What are the reasons for the same?

Method. Look for prices that are printed, notified or capped rather than bargained. Three good
places to search: the maximum retail price printed on any packaged good, the fare charts
displayed at bus stands and railway stations, and any notified minimum — the minimum wage
board's rates displayed at a worksite. For each one you find, record three things: is it a
maximum or a minimum, who is being protected, and what would happen without it.
What a good answer must contain: examples you can point to, sorted into the chapter's two
categories — a price ceiling (a maximum, protecting buyers) and a price floor (a minimum,
protecting sellers or workers) — plus the reason for each. Note that the tobacco and alcohol
case in the question is a third kind: a tax, which raises the price rather than fixing it.
Sample answer, built from the chapter's own examples.

Page 50 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

GOOD OR TYPE OF CONTROL REASON
SERVICE

Essential Price ceiling — a maximum retail price They cannot be postponed and have no
medicines substitute; a cap prevents overcharging of
people who are ill

Hand sanitisers, Price ceiling — ₹100 for a 200 ml Demand surged, stocks ran out, and
2020 bottle, under the Essential shopkeepers began hoarding and black-
Commodities Act, 1955 marketing

Labour — Price floor — a minimum wage “To ensure workers earn enough for their
wages hard work”, where many workers compete for
few jobs

Public bus and Ceiling — notified fares Daily travel is a necessity, and on many routes
train fares there are few operators, so buyers have little
choice

Tobacco and Not a control but a high tax Deliberately raises the price so that quantity
alcohol demanded falls, to promote healthier choices

The reasons sort into four kinds.

Affordability of essentials. Markets allocate by willingness and ability to pay, so an
unregulated price can put a necessity beyond the reach of low-income households.
Protecting the weaker side of a bargain. A minimum wage is a floor because an individual
worker has little bargaining power against an employer.
Preventing exploitation during shortages. Hoarding and black-marketing appear exactly
when a good is scarce and urgently needed.
Discouraging harmful consumption. Here a high tax is used because the Law of Demand
works: a higher price reduces quantity demanded.

Why the tobacco case is the reverse of the others: a price ceiling is meant to keep
a good within reach; a heavy tax is meant to push it out of reach. Both are
governments using the price mechanism deliberately, but with opposite aims — and
both work only because buyers respond to price in the way the Law of Demand
describes.

Tip: keep this answer to controls you can actually verify from a label, a notice board
or a government website. The chapter's warning about price distortions applies to
your answer too — a control quoted from memory, without its reason, teaches
nothing.

Page 51 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Q7 Can excessive government regulation hurt markets? Explain with suitable
examples.

Yes — and the chapter devotes a whole section to it, while being equally clear that some
regulation is necessary. Its exact position: “Although government regulations are required
when markets are inefficient, they must be implemented carefully, as excessive government
intervention can have adverse effects.” The problem is never regulation as such; it is regulation
that is too heavy, too rigid, or left in place after the need has passed.
The three harms, with the chapter's own examples.

HARM HOW IT WORKS EXAMPLE FROM THE CHAPTER

Price distortions and A price fixed below the Wheat capped at ₹20 per kg when market forces
reduced producer market level makes set ₹30 — the farmer is ₹10 short on every
incentives production less rewarding, kilogram, “which may lead to reduced production
so less is produced and shortages”

Compliance burdens Extensive regulations, A small restaurant needing clearances for food
licences, permits and safety, fire safety, pollution control and local
procedures cost time and permissions; “the time and cost involved can
money before any business discourage small entrepreneurs from starting or
is done expanding businesses”

Discourages innovation If returns are capped, there Farmers facing price distortions “won't invest in
and entrepreneurship is no reward for investing in better seeds, irrigation, or technology”, which
something better “reduces long-term productivity and output”

Market price of wheat = ₹30/kg · Government maximum = ₹20/kg

Loss to the farmer per kg = 30 − 20 = ₹10

On 1,000 kg → ₹10,000 less income

Response → sow less wheat next season → supply falls → shortage

Notice the chain in each case. The harm is never the rule itself but what the rule does to
behaviour: a capped price changes what a farmer plants; a stack of clearances changes whether
a young person opens a restaurant at all; a ceiling on returns changes whether anyone buys a
better seed. Regulation acts on incentives, and incentives decide supply.
The other half of the balance, which a complete answer must include. The same chapter
shows regulation working. The sanitiser price cap of 2020 protected consumers during a
genuine emergency and, because new firms could enter quickly, supply rose and sanitisers

Page 52 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

“soon became widely available at fair prices”. Regulators such as RBI, CCPA, TRAI and SEBI keep
markets transparent without setting prices at all. Public goods — roads, streetlights, sanitation
— exist only because the government provides them.

Why the answer is “it depends on the design”: the tests are whether the
regulation addresses a real market failure, whether it is the lightest tool that would
work, whether it allows supply to grow, and whether it is reviewed. India is described
as a market-based, regulated economy precisely because it tries to hold both
together — prices set by demand and supply, with the government correcting where
that fails and stepping back where it does not.

Q8 In the table below, different prices of guava are given. a. Think and write how much
guava you will buy at each price. b. Ask the same question to three of your friends
and fill in the table. c. Also make a graph for each one of you and one final graph for
the total quantity.

PRICE YOU FRIEND 1 FRIEND 2 FRIEND 3 TOTAL

₹100/kg

₹80/kg

₹50/kg

₹20/kg

The blank table printed with Question 8 on page 211 — fill it in yourself.

Method. Fill your own column first, honestly, moving down the price list: at ₹100 a kilogram,
how much guava would you buy in a week? At ₹80? At ₹50? At ₹20? Then ask each of three
friends the same four questions without showing them your answers, so their numbers are
their own. Add across each row to get the Total column — that total is the market demand of
your little four-person market, exactly as Table 9.1 sums Srivalli, Alex and Israt.
What a good answer must contain: (i) every column showing quantity rising as price falls — if
any column falls, ask that friend again, because something other than price has crept in; (ii) a
Total column that is the exact sum of the four; (iii) four individual graphs plus one market graph,
all with price on the y-axis and quantity on the x-axis; and (iv) a sentence noting that the market
curve is flatter than any individual curve, and why.

Page 53 of 69

as e
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market
a g l AglaSem · NCERT Solutions

Sample answer (your own numbers will differ — that is the point of the exercise):
co m
se m.
o m l a
. c ag
PRICE YOU FRIEND 1 FRIEND 2 FRIEND 3 TOTAL

se m 1 kg
g l a
₹100/kg 0 kg 2 kg 1 kg 1+0+2+1 = 4 kg

a
₹80/kg 2 kg 1 kg 3 kg 1 kg 2+1+3+1 = 7 kg

co m
m . ag
se6 kg
₹50/kg 3 kg 2 kg 4 kg 3 kg 3+2+4+3 = 12 kg

l a
₹20/kg 5 kg 4 kg
ag 5 kg 5+4+6+5 = 20 kg

co m
e m.
m l as
.co a g
a s em
a gl
Price of guava (₹ per kg)

100
Total (market) demand of the four of us

m a s
.co agl
80

se m
g l a
a
50

co m
20
m .
as e
my own demand

m l
m .co 20 a g
ase
4 7 12

agl
Quantity of guava (kg)

se m
The Total column plotted as a market demand curve, with one individual curve (mine: 1, 2, 3, 5 kg)

com
drawn on the same scale for comparison.
g l a
m . a
e
as slopes downward — that is the Law of Demand appearing
What the graphs show. Every lcurve
a g
in real answers rather than in a textbook. And the total curve is much flatter: the price fall from

m
₹100 to ₹20 adds 4 kg to my own demand but 16 kg to the market's, because four people are

. co
m
responding instead of one. That is precisely the point made in the DON'T MISS OUT box on page

m as e
.co l
198.

a g
se m
g l a
a c
m .
m a s e
e m . co agl
g l as
a

co m
m .
m as e
.co


a g l Page 54 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Price falls ₹100 → ₹20, a fall of ₹80

My quantity: 1 kg → 5 kg, a rise of 4 kg

Total quantity: 4 kg → 20 kg, a rise of 16 kg

Steepness of my curve = ₹80 ÷ 4 = ₹20 per extra kg

Steepness of the total curve = ₹80 ÷ 16 = ₹5 per extra kg → much flatter

Check it yourself: if one friend writes the same quantity at every price, ask why.
Usually it means they buy a fixed amount because their family eats that much
whatever it costs — a real and interesting answer, and worth noting on the graph as
a vertical line.

Q9 Visit the nearby vegetable market and try to find answers to the following
questions. a. Who decides the prices of different vegetables in the vegetable
market? b. Sometimes the prices of a few vegetables is too high, and sometimes too
low. Why is this? c. The price of tomatoes is high in the morning and eventually gets
lower by the evening. Have you ever noticed this? Comment.

Method. Go early, and go again in the evening. Carry a small notebook and record the price of
three or four vegetables at both visits. Then ask two or three sellers the same three questions,
and one or two buyers as well — the two sides often give different answers, and the difference
is itself part of the answer. Useful questions to ask a seller: where did you buy this stock and at
what rate? what do you do with what is left at closing time? what happened to prices after the
last rain?
What a good answer must contain: the prices you actually recorded, at least one seller's own
words, and an explanation that uses demand and supply rather than blaming any one person.
(a) Who decides the prices? Nobody, and everybody. This is the point most students get
wrong. The seller quotes a price, but he cannot choose it freely.

Below him is a floor: the rate he paid at the wholesale market or mandi that morning, plus
his transport and the day's rent. He cannot sell below that for long.
Above him is a ceiling: what the seller in the next stall is charging. Buyers can simply walk
four steps, so no seller can hold a price much above the others.
Between them, bargaining. Buyers ask for less, sellers ask for more, and the price that day
settles where the vegetables actually clear.

Page 55 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

So the price is decided by the interaction of demand and supply, exactly as the chapter says:
“prices are determined by the interaction between demand and supply”, through “negotiation
between what buyers are willing to pay and what sellers are willing to accept”.
(b) Why are prices sometimes very high and sometimes very low? Because the supply of
vegetables swings sharply while demand stays fairly steady.

CAUSE EFFECT ON WHY
PRICE

Harvest season, heavy arrivals Price falls Market supply rises; unsold perishable stock forces
in the mandi sellers to cut prices

Between harvests, or a failed Price rises Supply falls while demand is unchanged, creating a
crop shortage

Unseasonal rain, hail, flood Price rises “Change in weather, disaster” cuts supply at once, and
sharply crops cannot be replaced quickly

Transport disruption — a Price rises The vegetables exist but cannot reach this market
blocked road, a strike

Festivals and weddings Price rises Seasonal demand rises while supply is unchanged

Storage or holding back stock Price rises Wholesalers expecting higher prices later reduce what
they release today

Why the swings are so large for vegetables in particular: households buy roughly
the same quantity of everyday vegetables whether the price is ₹20 or ₹60 — you
cannot easily eat half a tomato instead of one. When buyers cannot cut back much,
even a small fall in supply needs a large rise in price before demand and supply
meet again.

(c) Why tomatoes are dearer in the morning and cheaper by evening. Yes — this is easy to
verify, and the reason lies with the seller's position rather than the tomato's.

MORNING EVENING

Stock in hand Full day's stock, fresh Whatever is left, a day older

Buyers Many, wanting the freshest, willing Few — most households have already bought
to pay for it

Cost of not Low — there is a whole day left Very high — unsold tomatoes will spoil overnight
selling and be worth nothing

Price Held up Cut, until the stock clears

Page 56 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

Unsold tomatoes at closing → worth about ₹0 tomorrow

So any price above zero beats holding them

Seller lowers the price → more buyers step in (movement down along the demand curve)

He keeps lowering it until the surplus is cleared

Check it yourself: compare a vegetable stall with a shop selling notebooks or steel
vessels in the same market. The second shop does not cut prices every evening —
because its goods do not spoil, so holding stock costs it almost nothing. The
difference between the two shops is the whole explanation.

Q10 Categorise the following combination of goods into substitute goods and
complementary goods. a. Movie ticket in the cinema hall 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

Apply one test to each pair: are they used together, or does one replace the other? The
chapter's definitions do all the work — substitutes “can replace each other”, complements “are
generally used together to provide utility to the consumer”.

Page 57 of 69

Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

PAIR CATEGORY WHY

a. Movie ticket in the Complementary You buy popcorn because you are at the film. The
cinema hall and chapter's own example: costlier tickets mean fewer
popcorn people at the cinema, so popcorn sales fall

b. Eraser and pencil Complementary An eraser is used with pencil writing; buy more pencils
and you need more erasers

c. Laptop and Substitute Both do the same job, so a buyer chooses one or the
computer other. If desktop computers become dearer, more
people buy laptops

d. Air Conditioner and Substitute Both cool a room; if air conditioners become
cooler expensive, demand for coolers rises

e. Notebook and pen Complementary A notebook is of no use without something to write
with; they are bought together at the start of a
session

f. Apple and banana Substitute Either can be the day's fruit. The chapter's own case: if
mangoes are too costly, Srivalli buys bananas instead

g. Mobile and Complementary The chapter names this pair itself — “smartphones
earphones and earphones” — used together to give the
consumer utility

Summing up:

Substitute goods → c, d, f

Complementary goods → a, b, e, g

The price test, if you are unsure: imagine the price of the first good doubling and
ask what happens to the demand for the second.
· Demand for the second rises → they are substitutes (air conditioners dearer →
more coolers sold).
· Demand for the second falls → they are complements (cinema tickets dearer →
less popcorn sold).
This test settles every borderline case, because it uses the definition rather than
intuition.

Page 58 of 69

as e
a g l
Class 9 Social Science Chapter 9 The Price Puzzle: What Drives the Market AglaSem · NCERT Solutions

co m
m.
Tip: the same two goods can be either, depending on how they are used. Tea and

m the use, not the object. as e
l
coffee are substitutes at breakfast; tea and sugar are complements in the same cup.
. coabout a g
em
Always ask
a s
agl

co m
e m . ag
g l as
a

co m
em.
m l as
m .co a g
l a se
a g
m a s
m .co agl
l a se
a g

co m
m .
m as e
.co a g l
se m
g l a
a
se m
com g l a
m . a
ase
agl

co m
m .
m as e
.co a g l
se m
g l a
a c
m .
m a s e
e m . co agl
g l as
a

co m
m .
m ase
.co


a g l Page 59 of 69