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Posted by Isha Guha 6 years, 8 months ago
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Devashish Kumar Jha 6 years, 8 months ago
Posted by Ananthu Ak 6 years, 8 months ago
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Yogita Ingle 6 years, 8 months ago
Minimum price ceiling means the least price that could be paid for a good or service. It is the price fixed by the government for a good in the market. The government fixes the price on agricultural products and food grains in particular so that the farmers get their fair price of a commodity which otherwise actually can be sold with too low of a price.
Effects of price floor:
(i) Minimum Return: Farmers are ensured with the minimum returns as their products are completely sold in the market at comparatively higher price. This leads to an increase in their level of income.
(ii) Maximum Level of output: The government ensures to buy the full produce of the farmers which are not sold in the market at the price floor. Hence, they are able to produce the maximum level of output.
(iii) Burden on Government: It also puts extra burden on the government revenues. It becomes mandatory for the government to purchase the excess produce, even if it runs a sufficient volume of buffer stocks.
(iv) Higher Taxes: The government also tries to shift the burden (associated with purchasing the excess produce at higher price) to the consumers and the traders in form of higher taxes.
Isha Guha 6 years, 8 months ago
Posted by Ananthu Ak 6 years, 8 months ago
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Yogita Ingle 6 years, 8 months ago
Minimum price ceiling means the least price that could be paid for a good or service. It is the price fixed by the government for a good in the market. The government fixes the price on agricultural products and food grains in particular so that the farmers get their fair price of a commodity which otherwise actually can be sold with too low of a price.
Effects of price floor:
(i) Minimum Return: Farmers are ensured with the minimum returns as their products are completely sold in the market at comparatively higher price. This leads to an increase in their level of income.
(ii) Maximum Level of output: The government ensures to buy the full produce of the farmers which are not sold in the market at the price floor. Hence, they are able to produce the maximum level of output.
(iii) Burden on Government: It also puts extra burden on the government revenues. It becomes mandatory for the government to purchase the excess produce, even if it runs a sufficient volume of buffer stocks.
(iv) Higher Taxes: The government also tries to shift the burden (associated with purchasing the excess produce at higher price) to the consumers and the traders in form of higher taxes
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Harika Muskan 6 years, 8 months ago
Posted by Guneet Rangi 6 years, 8 months ago
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Yogita Ingle 6 years, 8 months ago
| Desire | Demand |
| (i) Desire simply refers to the mere wish of a person to have a particular commodity. | Demand refers to a desire backed by the ability and willingness to pay for a particular commodity. |
| (ii) A person can desire anything at any point of time. There are no limitations for a desire. | There are several limitations affecting demand like ability to pay, willingness to buy etc. |
| <div>(iii) There is no relation between desire with price, place and time.</div> | Demand has relation with price, place and time |
| (iv) Desire has a wider scope as it includes demand. | Demand has a narrow scope as it is a part of desire. |
Posted by Guneet Rangi 6 years, 8 months ago
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Yogita Ingle 6 years, 8 months ago
Circular flow of income refers to the continuous circulation of production, income generation and expenditure involving different sectors of the economy. Phases of Circular Flow of Income There are three different phases (generation, distribution and disposition) in circular flow of income, as shown in the given diagram:
(i) Production phase In this phase, firms produce goods and services with the help of factor services.
(ii) Income phase This phase involves the flow of factor income (rent, wages, interest and profits) from firms to the households.
(iii) Expenditure phase In this phase, the income received by factors of production, is spent on the goods and services produced by firms.
Income is first generated in production units, then distributed to households and finally spent on goods and services produced by these units to make the circular flow complete its course.
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Abhishek Attri 6 years, 8 months ago
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