What is the nature of government inervention which leads to excess sup

1.	What is the nature of government inervention which leads to excess supply ?
Answer» Solution :The NATURE of government intervention which leads to excess supply is CALLED price floor. In which, the government intervenes in the market if it feels that the price is too low for the producers to SELL their produce. Government fixes the minimum price which is greater than the equilibrium price on which the producers can sell their GOODS and services. Since, this price is higher than the equilibrium price it creates excess supply on that very level.

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