Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Market Equilibrium

Question:

What does below graph shows?

Options:

Price ceiling

Price floor

Both

None

Correct Answer:

Price floor

Explanation:

The correct answer is option 2: Price floor

The government imposes a lower limit on the purchase price for some of the goods and the floor is normally set at a level higher than the market-determined price (equilibrium price) for these goods.