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Explain the concept of 'Buffer stock' as a tool of price floor. |
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Answer» Buffer stock is an important tool in the hands of government to ensure price floor/minimum support price. If in case, the market price is lower than the government feels should be given to the farmers/producers it would purchase the commodity at higher price from the farmers/ producers so as to maintain stock of the commodity with itself to be released in case of shortage of the commodity in future. |
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