Administered
prices are the price which is imposed and fixed by the government to balance up
the imbalance of particular things of a society.
Objectives of
administered prices
(1)To
protect the interest of weaver section of the society: To protect the
weaver section as the poor class people of society the government determine the
prices of essential things which are necessary for living. ex-determining the
price of rice, dal etc.
(2)To discourage or encourage the consumption of certain commodities: The government sometime increase or decrease the price of particulars things to increase or to decrease the use of it.
ex-lessening
up the price of fertilizer to encourage farmers and increasing the price of
petrol to discourage the users to protect the environment from pollution.(2)To discourage or encourage the consumption of certain commodities: The government sometime increase or decrease the price of particulars things to increase or to decrease the use of it.
(3)To mitigate inflation or prevent stagflation: Any increase in the general price level called inflation and stagflation is when there exist heavy price rise of commodities and the production rate become zero. The government tries to reduce these two problem by imposing administered price.
(4)To raise public revenue: To fulfill the lacking of a government and to reduce the deficit budget the government collects revenue through administered prices. ex-Railway fare
(5)To ensure the efficient allocation of resources: To distributing and allocating the resources in a effective manner the government impose administered prices. ex-distribution of gas system
(6)To promote the political goal: Sometimes the administered prices are used to achieve political goal.
ex-government providing scarce technology available in the hand of general people to become favorable in the eyes of the general for being chosen for the next time to run the state.
