Read the following statements - Assertion (A) and Reasoning (R):

Assertion: Price ceiling is fixed above the market-determined price.

Reasoning: At the market-determined price, some section of the population will not be able to afford these goods.

Assertion (A) is false but Reasoning (R) is true.

The correct answer is Option 4: Assertion (A) is false but Reasoning (R) is true.

• Assertion (A): "Price ceiling is fixed above the market-determined price."

  • This is false because a price ceiling is always set below the equilibrium price, not above it.
  • The purpose of a price ceiling is to make essential goods (such as food, rent, or medicine) more affordable, which happens only when the price is artificially lowered below the equilibrium price.

• Reasoning (R): "At the market-determined price, some section of the population will not be able to afford these goods."

  • This is true because market prices may sometimes be too high for certain consumers, leading to affordability issues.
  • This is one of the main reasons governments impose price ceilings to make essential goods accessible to the lower-income population.