How government intervention through price control policy will have an impact on the market?

(A) The government imposed lower limit on the price that may be charged
(B) For certain goods and services, a fall in price below a particular level is not desirable
(C) Thereby leading to an excess supply in the market
(D) Government needs to buy the surplus at the predetermined price

Choose the correct answer from the options given below:

(B), (A), (C), (D)

The correct answer is Option (1) → (B), (A), (C), (D)

(B) For certain goods and services, a fall in price below a particular level is not desirable. → This explains why the government intervenes — to protect producers.

(A) The government imposes a lower limit (price floor) on the price that may be charged. → This is the policy action taken — a minimum price (e.g., Minimum Support Price).

(C) As a result, the price is kept above equilibrium, leading to excess supply (surplus).→ This is the market outcome of the intervention.

(D) To maintain the price floor, the government buys the surplus at the predetermined price. → This is the government’s corrective step to handle the surplus.