Explain the concept of minimum price support policy/price flooring.

1.	Explain the concept of minimum price support policy/price flooring.
Answer» Price flooring is such a price which is fixed by the government more than equilibrium price of the product .Generally it happens when the producers are found in loss on selling their goods at equilibrium point. To protect them the government fix the price of the product ,so that producer can get proper price or more price of their good . It is also called minimum support price becauce no any other purchaser can purchase the product of these producers at price less than the price fixed by the government.<br>Price floor means the lowest or minimum price fixed by the government for a product. The government fixes price for farm products. This regulates income of the farmers.

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