Read the following statements carefully.
Statement 1: Price ceiling is for benefit of consumers and price floor is for the benefit of sellers.
Statement 2: Price ceiling and floor are set for essential commodities.

Statement 1 is true and Statement 2 is false.

The correct answer is option 3: Statement 1 is true and Statement 2 is false.

Statement 1: True

• Price Ceiling: A maximum limit set by the government on the price of essential goods (e.g., food, rent, medicines) to protect consumers from high prices.
• Price Floor: A minimum limit set by the government to ensure producers/sellers get a fair price (e.g., minimum wages, support price for farmers).
• Since price ceilings benefit consumers and price floors benefit sellers, this statement is correct.

Statement 2: False

• Price ceilings are typically applied to essential commodities (like food, medicines).

• Price floors are often used for agricultural products to support farmers' incomes, but they can also be applied to labor (minimum wage) or other sectors.

• Statement 2 is false because price floors are not limited solely to essential commodities.