Read the passage carefully and answer the questions based on the passage:

FLOOR PRICES

For certain goods and services, fall in price below a particular level is not desirable and hence the government sets floors or minimum prices for these goods and services. The government imposed lower limit on the price that may be charged for a particular good or service is called price floor. Most well-known examples of imposition of price floor are agricultural price support programmes and the minimum wage legislation. Through an agricultural price support programme, the government imposes a lower limit on the purchase price for some of the agricultural goods. Similarly, through the minimum wage legislation, the government ensures that the wage rate of the labourers does not fall below a particular level.

Floor prices are meant for the welfare of ____.

Producers

The correct answer is Option (2) → Producers

Floor prices (or minimum prices) are fixed above the equilibrium price mainly to protect producers — such as farmers or workers — from receiving unfairly low prices for their goods or labour.

• For example, in agriculture, the Minimum Support Price (MSP) ensures that farmers get a minimum guaranteed price for their produce even if the market price falls.

• Similarly, minimum wage laws protect labourers by ensuring they are paid at least a certain amount for their work.