Which of the following is not true regarding The Minimum Support Price (MSP) mechanism in India?

CA Foundation · Business Economics · MTP · September 2024
Which of the following is not true regarding The Minimum Support Price (MSP) mechanism in India?
(A) A. MSP works on the principle of Price Ceiling
(B) B. MSP works on the principle of Price Flooring
(C) C. At the price fixed, there exists excess supply
(D) D. Govt. procures the excess supply of farmers.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. MSP works on the principle of Price Ceiling

Topics: Public Finance

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