Read the following statements - Assertion (A) and Reasoning (R):

Assertion: Price ceiling is set at a price lower than the equilibrium price.

Reasoning: The equilibrium price gets too high because of which poor people cannot afford the commodity.
From the given alternatives choose the correct one:

Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A).

The correct answer is option 2: Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A).

• Assertion (A): "Price ceiling is set at a price lower than the equilibrium price."

  • This is true because a price ceiling is a maximum legal price imposed by the government to make essential goods affordable. It is always set below the equilibrium price to prevent prices from rising too high.

• Reasoning (R): "The equilibrium price gets too high because of which poor people cannot afford the commodity."

  • This is true because price ceilings are usually implemented for essential goods (such as food, rent, and medicines) when market prices rise too high, making them unaffordable for low-income groups.

• Is Reasoning (R) the correct explanation of Assertion (A)?

  • Yes, because the government introduces price ceilings specifically to control high prices that make goods unaffordable for poor consumers. The reason for setting a price ceiling is to ensure accessibility by keeping prices lower than the equilibrium level.