What is called the minimum price of a commodity that is fixed by government in order to save the interests of producer of raw materials ?
Correct answer: A. Floor price
- A. Floor price
- B. Fixed price
- C. Bid price
- D. Basic price
Explanation
A price floor is a government-imposed minimum price, often intended to protect producers from prices falling below a viable level. It is effective only when set above the market equilibrium price.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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