Econ 101 Price Floor

The most common example of a price floor is the minimum wage.

Econ 101 price floor.

The most common price floor is the minimum wage the minimum price that can be payed for labor. For example many governments intervene by establishing price floors to ensure that farmers make enough money by guaranteeing a minimum price that their goods can be sold for. A price floor is the lowest legal price a commodity can be sold at. Final exam ch.

Price floors defines minimum price price ceilings. Price floors are used by the government to prevent prices from being too low. 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. This is a combination of news items.

Terms in this set 7 price floor a price floor is a government set price above equilibrium price it is a tax on consumers and a subsidy to producers. Course summary economics 101. Download this econ 101 class note to get exam ready in less time. Textbook chapter 6 2.

A price floor is an established lower boundary on the price of a commodity in the market. For a price floor to be effective the minimum price has to be higher than the equilibrium price. Class note uploaded on feb 26 2015.