Why does the government of India fix 'support price' for some crops? E

1.	Why does the government of India fix 'support price' for some crops? Explain.
Answer» For some Crops tall in price below a certain level is not good for the farmers. Hence, the government fixes minimum price for these crops. Detailed Answer: When government fixes price of a product at a level higher than equilibrium price, it is called 'support price'. It is the minimum price the producers must be paid for their product. Support price is fixed for some crops to safeguard the interest of producers. Basically the main aim of firing support price is to insulate and protect the farmers from fluctuations in their income which is caused by price variations in the free market.

Why does the government of India fix 'support price' for some crops? Explain.

Answer»

For some Crops tall in price below a certain level is not good for the farmers. Hence, the government fixes minimum price for these crops.

Detailed Answer:

When government fixes price of a product at a level higher than equilibrium price, it is called 'support price'. It is the minimum price the producers must be paid for their product. Support price is fixed for some crops to safeguard the interest of producers. Basically the main aim of firing support price is to insulate and protect the farmers from fluctuations in their income which is caused by price variations in the free market.

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