Question

How is Administrative Price Mechanism (APM) different from Minimum Support Price (MSP)?

Answer 1

Administrative Price Mechanism	Minimum Support Price
1. Under APM, a price is fixed and it is mandatory for the traders to sell their goods at that price level in the market.	1. A minimum support price is a price at which the farmers can sell their grain to the government.
2. It is compulsory for traders to follow the APM.	2. It is not compulsory for farmers to sell their goods at MSP
3. It helps in preventing hoarding and keeps the prices of essential commo‐ dities within reasonable levels.	3. It helps the farmers to gain their  of cost cultivation plus a minimum profit  on the production