The correct answer is option 3: i, iii
A price floor is a minimum price set above the equilibrium price by the government to ensure producers or workers receive fair compensation. In India, price floors are applied in the following cases:
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i. Minimum wage legislation ✅ (Correct)
- The government sets a minimum wage that employers must pay to prevent exploitation of workers.
- This ensures that workers receive at least a basic level of income.
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ii. Medicines ❌ (Incorrect)
- Medicine prices in India are controlled using price ceilings, not price floors, to make them affordable for consumers.
- The National Pharmaceutical Pricing Authority (NPPA) regulates medicine prices under Drug Price Control Orders (DPCO).
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iii. Agricultural price support programs ✅ (Correct)
- The government sets Minimum Support Prices (MSP) for certain crops to ensure farmers receive fair compensation even when market prices fall.
- This is a classic example of a price floor.
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iv. Salt and other necessities ❌ (Incorrect)
- Essential items like salt, rice, and kerosene are often subsidized or controlled through price ceilings to keep them affordable, not through price floors.
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