Question

Do producers favor price supports or price ceilings and why? Do producers favor price supports or price ceilings and why? @Economics - Finan…

Answer 1

Producers wil obvious favor Price Supports from the govt as that means that the price will not go below the support and this guarantees the producer at least a mimimum profit. They would NOT like a price ceiling as that would prevent them from raising the price even if their costs went up. wmw

Answer 2

I agree with WWENDT sir. And as we all know in the current scenario everyone just wants to make profit with less risk. So, the producers want to have a support price from the government i.e., the minimum price they will be able to recieve in extreme case. But if their will be an upper ceiling that will bind them to sell below or at that level that is they cannot sell above that ceiling so it will reduce there profit upto a certain level. Hence, producers want a support price but not an upper ceiling.