Assume that the government sets a price floor in the market for wheat and the price floor is set below themarket equilibrium of wheat. Discuss carefully THREE points showing effectiveness of this policy on the market. Please provide with 3 points

Managerial Economics: A Problem Solving Approach
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ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
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Chapter8: Understanding Markets And Industry Changes
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Assume that the government sets a price floor in the market for wheat and the price floor is set below the
market equilibrium of wheat. Discuss carefully THREE points showing effectiveness of this policy on the market. Please provide with 3 points

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Price controls aim at setting a minimum and maximum prices for the product for the welfare of the people. These prices are set by the government. Price ceiling is undertaken by the government to set maximum prices for the product to ensure that consumers are not exploited. Floor price is used to set minimum prices for the product to ensure producers are paid just prices. 

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