What is minimum price ceiling? Explain Its implications.

1.	What is minimum price ceiling? Explain Its implications.
Answer» Solution :Price floor or Minimum Price Ceiling is the minimum price FIXED for a commodity by the government (above the equilibrium price), which MUST be paid to the producers for their produce. As a result of price floor, the market price is above the equilibrium price, leading to excess SUPPLY. The implications are that the producers start selling their products illegally at a price lower than that set by the government SINCE the demand is not enough at the price set by the government.

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