Question

Floor price is the minimum price for a commodity or service.

• A. True
• B. False

Answer 1

The correct option is A True

A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product, good, commodity, or service. A price floor must be higher than the equilibrium price in order to be effective. A minimum price is when the government don't allow prices to go below a certain level. If minimum prices are set above the equilibrium it will cause an increase in prices. ... Therefore, minimum prices have been used to increase prices above the equilibrium. This enables farmers to get a higher revenue.