NCERT Solutions for Class 7 Social Science Chapter 12: Understanding Markets

Questions and Activities

1. What are the main features of a market? Recall a recent visit to a market to purchase a product. What are the different features of a market that you observed during this visit?

Answer: The main features of a market are the presence of buyers and sellers, goods and services exchanged, and a mutually agreed price. In my recent visit to a local market, I observed people bargaining, a variety of stalls, different goods, price displays, and active exchanges between buyers and sellers.

2. Remember the epigraph from a famous economist at the beginning of the chapter? Discuss its relevance in the context of the chapter you have read.

Answer: The epigraph by Adam Smith indicates that prosperity arises when markets allow people to obtain goods and services they can't make themselves. The chapter shows that markets connect people, help fulfill needs and wants, and enable economic activities, affirming the economist’s statement.

3. In the example of buying and selling of guavas, imagine that the seller is getting a good price, and is able to make a profit. He will try to get more guavas from farmers to be able to sell them at the same price and increase his earnings. What is the farmer likely to do in this kind of a situation? Do you think he will start thinking about the demand for guavas in the next season? What is likely to be his response?

Answer: The farmer will notice the increased demand for guavas and likely decide to grow more guavas for the next season to maximize profit. Understanding market demand helps farmers plan their crops accordingly, ensuring supply matches buyers’ requirements.

4. Match the following types of markets with their characteristics:

5. Prices are generally determined by the interaction between demand from buyers and supply by sellers. Can you think of products where prices are high despite a lesser number of buyers demanding the product? What could be the reasons for that?

Answer: Yes, products like luxury cars, antiques, and rare art have high prices even if only a few buyers exist. This is due to limited supply, exclusivity, production costs, and perceived prestige associated with ownership.

6. Look at the real-life situation that a retail seller of vegetables encountered: A family came to shop for vegetables. The price of beans that the seller on the cart was offering was ₹30/kg. The lady started to bargain with the seller to bring the price down to ₹25/kg. The seller protested and refused to sell at that price saying he would make a loss at that price. The lady walks away. The family then goes to a super bazaar nearby. They buy vegetables in the super bazaar where they pay ₹40/kg for the beans that is neatly packed in a plastic bag. What are the reasons that the family does this? Are there factors that affect buying and selling which are not directly connected to price?

Answer: The family might prefer the super bazaar for factors such as better packaging, perceived cleanliness, convenience, and fixed pricing. Factors like trust, hygiene, location, and shopping experience influence buying decisions beyond just the price.

7. There are some districts in India that are famous for growing tomatoes. However, during some seasons, the situation is not good for farmers. With a large quantity of harvest, there are reports of farmers throwing away their produce and all their hard work going to waste. Why do you think farmers do this? What role can wholesalers play in such situations? What are the possible ways of ensuring that the tomatoes are not wasted, and the farmers are also not at a loss?

Answer: When supply exceeds demand, prices fall so low that farmers cannot recover costs, leading them to throw away produce. Wholesalers can help by arranging wider distribution or storage. Processing, better storage, and direct sales can prevent waste and support farmers.

8. Have you heard about or visited a school carnival/fair organized by your school or any other school? Discuss with your friends and teachers about the kind of activities organized by students there. How do they conduct selling and negotiation with the buyers?

Answer: Yes, in school carnivals, students set up stalls for food, games, and crafts. They practice selling by displaying prices but may negotiate or offer discounts to attract buyers. These activities mimic real market practices and teach negotiation skills.

9. Choose any 5 products and check out the label with the certification signs discussed in the chapter. Did you find products that did not have a logo? Why do you think this is so?

Answer: Many packaged foods have FSSAI and AGMARK marks, while appliances show the ISI or BEE star rating. Some local, handmade, or unbranded items may lack certification logos because they may not meet criteria, avoid the process, or aren't regulated.

10. You and your classmates have manufactured a soap bar. Design a label for its packaging. What in your opinion should be mentioned on the label for the consumer to know the product better?

Answer: The label should have the soap’s name, ingredients, weight, date of manufacture, expiry date, manufacturer’s details, MRP, batch number, certification mark (if any), instructions for use, and allergy warnings. This ensures consumers make informed choices.

Understanding Markets: Key Concepts for Class 7

Grasping core market concepts is vital for Class 7 Social Science exams. By studying features like buyers, sellers, pricing, and government roles, students can develop a clear understanding of how markets function in everyday life and society.

Pay close attention to the flow of goods from producer to consumer, and how markets operate both offline and online. This chapter strengthens your foundation in economics and helps you answer all questions confidently in the NCERT Solutions Class 7 Social Science Chapter 12 Understanding Markets (2025-26).

Revise regularly, practice diagram-based questions, and use label, list, and match formats for recall. Consistent revision boosts marks and ensures clarity, preparing you well for upcoming Social Science exams.