Price Floor Quantity Sold

Price floors are also used often in agriculture to try to protect farmers.

Price floor quantity sold. Perhaps the best known example of a price floor is the minimum wage which is based on the view that someone working full time should be able to afford a basic standard of living. A price floor is a government or group imposed price control or limit on how low a price can be charged for a product good commodity or service. The most common price floor is the minimum wage the minimum price that can be payed for labor. A price floor is an established lower boundary on the price of a commodity in the market.

A price floor is the lowest legal price a commodity can be sold at. It tends to create a market surplus because the quantity supplied at the price floor is higher than the quantity demanded. Tutorial on how to calculate quantity demanded and quantity supplied with a price floor and a price ceilings supply and demand. A price floor must be higher than the equilibrium price in order to be effective.

Price floors are used by the government to prevent prices from being too low. A price floor is a minimum price enforced in a market by a government or self imposed by a group. Governments usually set up a price floor in order to ensure that the market price of a commodity does not fall below a level that would threaten the financial existence of producers of the commodity.