The government-imposed lower limit on the price that may be charged for a good or service is called:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Price floor
A price floor is the lowest price the government allows for a good or service. The price is not allowed to fall below this lower limit.
Well-known examples are agricultural price support and the minimum wage. An upper limit would be a price ceiling.
NCERT (2026-27): “5.2.2 Price Floor 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.” |