Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Market Equilibrium

Question:

Minimum support price of a foodgrain is the example of _____.

Options:

Floor Pricing

Price Ceiling

Maximum retail Price

Price Discrimination

Correct Answer:

Floor Pricing

Explanation:

The correct answer is Option (1) → Floor Pricing

Minimum Support Price (MSP): It is the minimum price set by the government at which it purchases crops from farmers. It acts as a guaranteed floor below which the market price of the crop is not allowed to fall, protecting farmers from distress sales and market fluctuations.