Practicing Success
Read the passage and answer the following questions. |
Which of the following options show government intervention? |
Minimum support price Ceiling on LPG Both 1 and 2 None of the above |
Both 1 and 2 |
"Government intervention means that the government interfere in the day to day functioning of the market forces. MSP stands for minimum support price, it is the minimum price which the government decides for certain crops. If left in the hands of demand and supply, it will cause the prices of crops to fall too low causing losses to farmers. Similarly, ceiling on LPG is kept because LPG is an essential commodity consumed by everyone. So, if prices rise poor population will not be able to afford it." Both of these options involve government intervention in economic activities, making Option 3 the correct choice. |