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Tomorrow i will tell u about Marketing and Price ceiling. ??

Price floor - Price floor is also called minimum support price .It refers to the minimum price which is fixed by the government above the equilibrium price . ***when govt finds that equilibrium price is too low for the producers then govt start policy of Price floor or MSP. **It is also done by the govt to promote the production because when producers get low or normal income then they will reduce their particular good production ex wheat ..When can be result in shortage of wheat or it can become nation wide problem of wheat. **Implications -Price floor set by the govt above the equilibrium price. This leads to excess supply. When producers are not able to sell all they want they illegally sell the goods or services below the minimum price . **Govt purchase goods in bulk and it helps in maintaining buffur stock.

Marketing

Thanks for helping us......i want to learn about price floor and price ceeling covering all the main points, implications , etc....