Option 1, Minimum Support Price (MSP) for Jowar in India, is an example of a price floor. A price floor is a government-imposed minimum price that is set above the equilibrium price in a market. It aims to ensure that producers receive a fair price for their goods and prevents the price from falling too low.
In the case of Jowar in India, the government sets a minimum support price for Jowar, which is the lowest price at which the government agrees to purchase the grain from farmers. This price is typically higher than the equilibrium price determined by supply and demand forces in the market.
The purpose of setting a minimum support price for Jowar is to stabilize farmers` income and provide them with a guaranteed minimum income. It also encourages farmers to continue producing Jowar, especially during times of low market prices.
Option 2, subsidy given to farmers to buy fertilizers, is not an example of a price floor. Subsidies are a form of financial assistance provided by the government to lower the cost of production or consumption. They do not set a minimum price for the product.
Option 3, the price paid by people to buy goods from ration shops, and option 4, Maximum Retail Price (MRP)