What is minimum price ceiling explain its implications
Price floor or Minimum Price Ceiling is the minimum price fixed for a commodity by the government (above the equilibrium price), which must be paid to the producers for their produce. As a result of price floor, the market price is above the equilibrium price, leading to excess supply. The implications are that the producers start selling their products illegally at a price lower than that set by the government since the demand is not enough at the price set by the government.
For certain goods and services, Government, sets minimum price. This minimum price is called minimum price ceiling.This price is normally set at a level higher than the equilibrium price. This leads to axcess supply. Since producers are not able to sell all they want to sell, they illegally sell the good or service below the minimum price.