Q. 85.0( 1 Vote )

What is the minim

Answer :

● The government fixes a minimum price of certain goods in the market. This is called the minimum price ceiling.


● This price is usually set higher than the equilibrium price.


● This creates a situation of excess supply.


● Since the producers are unable to sell their goods, they resort to the illegal sale of goods below the minimum price ceiling.


OR


● If the prevailing market price is above the equilibrium price, there would be a situation of excess supply.


● The producers are not able to sell all their goods.


● This creates competition among the sellers of that good.


● The price begins to fall.


● The demand increases due to the falling price and supply begin to decrease.


● This continues till equilibrium is reached.


Rate this question :

How useful is this solution?
We strive to provide quality solutions. Please rate us to serve you better.
Try our Mini CourseMaster Important Topics in 7 DaysLearn from IITians, NITians, Doctors & Academic Experts
Dedicated counsellor for each student
24X7 Doubt Resolution
Daily Report Card
Detailed Performance Evaluation
caricature
view all courses
RELATED QUESTIONS :

What is the minimEconomics - Board Papers