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Que : 60. What is the price floor ? Give example.
Answer:

Government also intervenes in the process of price determination through price floor. Price floor refers to the minimum price (above the equilibrium price), fixed by the government, which the producers must be paid for their produce. Price floor or minimum price ceiling refers to imposition of lower limit on the price that may be charged for a particular good and services. When government feels that the price fixed by the forces of demand and supply is not remunerative fro the producers point of view, then it fixes a price known as price floor, which is more important than the equilibrium price.