Question:
Which of the following is an example of floor price?
Which of the following is an example of floor price?
Show Hint
Floor = minimum legal price (protects producers); Ceiling = maximum legal price (protects consumers).
Updated On: Sep 9, 2025
- Minimum Support Price for Foodgrain
- Price printed on any article
- Price taken by Seller
- Price asked by buyer to buy
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
Step 1: Define a floor price.
A price floor is a legally imposed minimum price below which market transactions cannot occur. It is set above equilibrium to protect producers.
Step 2: Match options.
- MSP (Minimum Support Price) is a classic policy example of a floor price used to protect farmers’ incomes.
- (B) “Price printed” is simply the listed/marked price, not a government floor.
- (C) “Price taken by seller” and (D) “Price asked by buyer” are bargaining quotes, not statutory minima.
Final Answer: \[ \boxed{\text{Minimum Support Price (MSP) is a price floor.}} \]
A price floor is a legally imposed minimum price below which market transactions cannot occur. It is set above equilibrium to protect producers.
Step 2: Match options.
- MSP (Minimum Support Price) is a classic policy example of a floor price used to protect farmers’ incomes.
- (B) “Price printed” is simply the listed/marked price, not a government floor.
- (C) “Price taken by seller” and (D) “Price asked by buyer” are bargaining quotes, not statutory minima.
Final Answer: \[ \boxed{\text{Minimum Support Price (MSP) is a price floor.}} \]
Was this answer helpful?
0
0
Top Questions on Economics
- Name the type of market competition in which there are a large number of sellers in the market for a commodity, but the product of each seller differs in some respect from the product of the other sellers; and product differentiation is the cornerstone.
- Match List-I with List-II: \[ \begin{array}{|c|l|c|l|} \hline \textbf{List-I} & & \textbf{List-II} & \\ \hline (A) & \text{Analysis assumes that level of utility can be expressed in numbers.} & (I) & \text{Cardinal Utility} \\ \hline (B) & \text{Change in total utility due to consumption of one additional unit of a commodity.} & (II) & \text{Law of Diminishing Marginal Utility} \\ \hline (C) & \text{Marginal utility from consuming each additional unit of a commodity declines as its consumption increases.} & (III) & \text{Marginal Utility} \\ \hline (D) & \text{The amount of mangoes that the consumer has to forego in order to get an additional banana, her total utility level being the same.} & (IV) & \text{Marginal Rate of Substitution} \\ \hline \end{array} \]
- When an individual buys foreign goods, this spending is known as ........
- The difference between the value of exports and the value of imports of goods of a country in a given period of time is known as by what name?
- Suppose an Indian manufacturer of steel acquires a steel manufacturing unit in Europe. This type of transactions are recorded in which of the following?
View More Questions
Questions Asked in CUET exam
- A person walks 10 m North, then turns right and walks 5 m, then turns right again and walks 10 m. What direction is he facing now?
- CUET (UG) - 2025
- Direction sense
- If $ A $ is a $ 2 \times 2 $ matrix and $ |A| = 4 $, then $ |A^{-1}| $ is:
- CUET (UG) - 2025
- Determinants
- The professor's explanation was so esoteric that even graduate students struggled to understand it. What is the meaning of "esoteric" in this context?
- CUET (UG) - 2025
- Vocabulary
- Pointing to a man, Rani says, "He is the son of my mother's only daughter.” How is the man related to Rani?
- CUET (UG) - 2025
- Blood Relations
- Rearrange the parts to form a logical sentence:
A) the city's new policy
B) has significantly improved
C) air quality
D) over the past year- CUET (UG) - 2025
- Sentence Arrangement
View More Questions