Question

How is administrative price mechanism APM different from Minimum support price MSP ?​

Answer 1

$\huge{\bold{ANSWER:-}}$

• Government helps farmers by procuring paddy and wheat through food corporation of India using (MSP) minimum support price .
• This policy helps not only the farmers but also used by the government to regulate the prices of paddy and wheat in the market.
• For preventing hoarding and keeping the prices of essential commodities within reasonable levels , and to facilitate their availability , the government fixes the prices and makes it mandatory for the traders to sell goods in the market at those price levels .
• Goods such as Kerosene , Diesel , LPG , CNG etc. are examples of goods whose prices are partly and solely subsidised by the government and sold under Administrative Price Mechanism (APM).

Answer 2

Explanation:

Administrative price mechanisim

1.Under APM,a price is fixed and it's mandatory for the traders to sell their goods at that price level in market.

2.It is compulsory for traders to follow the APM.

3.it helps in preventing Hoarding and keeps the price of essential commodities with in reasonable levels.

minimum support price

1.A minimum support price is a price at which the farmers can sell their grain to the government.

2.it is not compulsory for farmers to sell their goods at msp.

3.It helps the farmers to gain their cost of cultivation plus a minimum profit of the production