ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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limiting the ticket prices.
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setting a minimum wage.
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rationing tires.
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establishing rent controls.
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Detailed explanation-1: -An example of price floors is the minimum wage law in the labour market, where government, in order to protect the suppliers and interests of laborers, mandates a wage floor or minimum wage.
Detailed explanation-2: -The Correct Answer is Option 1, i.e Minimum Support price (MSP) for Jowar in India. A price floor is the lowest legal price a commodity can be sold at. Price floors are used by the government to prevent prices from being too low.
Detailed explanation-3: -Agricultural products: The price of milk is an example of a price floor. Consumers do not always pay higher prices for milk. In some cases, the government subsidizes the price or pays the farms directly.
Detailed explanation-4: -A price floor is a government-or group-imposed price control or limit on how low a price can be charged for a product, good, commodity, or service. A price floor must be higher than the equilibrium price in order to be effective. A minimum price is when the government don’t allow prices to go below a certain level.
Detailed explanation-5: -A price floor is the lowest price that one can legally charge for some good or service. It means equilibrium.