CUET Preparation Today
| Given below are 2 sets of statements in column I and column II. Match the statements in different columns (column 1 and 2) to make a correct pair. Column I i. Price floor ii. Simultaneous right shift in demand and supply iii. Price ceiling iv. Equilibrium when free entry and exit Column II a) Necessities like medicine b) Wage legislation c) Unambiguous effect on quantity d) Price = Minimum Average Cost Alternatives: |
i-b, ii-c, iii-a, iv-d i-b, ii-c, iii-d, iv-a i-a, ii-b, iii-c, iv-d i-b, ii-d, iii-a, iv-c |
| i-b, ii-c, iii-a, iv-d |
| (i-b) Price floor is set in case of minimum wage legislation so that wage rates do not fall below minimum rate. (ii-c) Simultaneous rightward shift in supply and demand curve leads to increase in quantity for sure bt an ambiguous effect on price which may increase, decrease or remain same. (iii-a) Price ceiling is set in case of necessities like medicines, etc. (iv-d) When free entry and exit of firms is there in the perfectly competitive market, no firm can ear abnormal profits and hence the price Is equal to minimum of average cost. |
