Option 1 -> At price Rs. 50, demand = 150 and supply = 170. Since supply > demand, there's excess supply, not demand.
Option 2 -> At government fixed price Rs. 50: Qd = 200 - 50 = 150 units and Qs = 120 + 50 = 170 units. Excess supply = 170 - 150 = 20 units.
Option 3 -> Calculation shows excess supply of 20 units, not excess demand of 50 units.
Option 4 -> Excess supply = Qs - Qd = 170 - 150 = 20 units, not 30 units.
Hence, Option 2: Excess supply of 20 units -> When government sets a minimum price (price floor) of Rs. 50, which is higher than the equilibrium price of Rs. 40, suppliers want to supply more (170 units) while consumers demand less (150 units). This creates excess supply of 20 units in the market. A price floor above equilibrium always results in excess supply as the artificially high price encourages production but discourages consumption -> correct