A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product,[1] good, commodity, or service. It is one type of price support; other types include supply regulation and guarantee government purchase price. A price floor must be higher than the equilibrium price in order to be effective. The equilibrium price, commonly called the "market price", is the price where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change, often described as the point at which quantity demanded and quantity supplied are equal (in a perfectly competitive market). Governments use price floors to keep certain prices from going too low.
Two common price floors are minimum wage laws and supply management in Canadian agriculture. Other price floors include regulated US airfares prior to 1978 and minimum price per-drink laws for alcohol. While price floors are often imposed by governments, there are also price floors which are implemented by non-governmental organizations such as companies, such as the practice of resale price maintenance. With resale price maintenance, a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices (resale price maintenance), at or above a price floor (minimum resale price maintenance) or at or below a price ceiling (maximum resale price maintenance). A related government- or group-imposed intervention, which is also a price control, is the price ceiling; it sets the maximum price that can legally be charged for a good or service, with a common government-imposed example being rent control.
^
"Price floor – Definitions from Dictionary.com". dictionary.reference.com. Retrieved 2008-05-02.
A pricefloor 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. It...
contrast to a pricefloor, a price ceiling establishes a maximum price at which a transactions can occur in a market. A serious issue for pricefloors as well...
two primary forms of price control: a price ceiling, the maximum price that can be charged; and a pricefloor, the minimum price that can be charged....
economics, a price support may be either a subsidy, a production quota, or a pricefloor, each with the intended effect of keeping the market price of a good...
certain prices (resale price maintenance), at or below a price ceiling (maximum resale price maintenance) or at or above a pricefloor. Rent Controls were...
pricing strategy would be the one that could balance between the pricefloor (the price below which the organization ends up in losses) and the price...
encourage decarbonisation of electricity generation in the UK: A Carbon PriceFloor to complement the European Union Emissions Trading Scheme (EU ETS); Feed-in...
terms, a minimum wage is a pricefloor for labor created by a legal threshold, rather than a reservation wage created by price discovery. The living wage...
prices (resale price maintenance), at or above a pricefloor (minimum resale price maintenance) or at or below a price ceiling (maximum resale price maintenance)...
the tax falls. Price controls such as the minimum wage which sets a pricefloor and market distortions such as subsidies or welfare payments also complicate...
lowest remuneration that employers can legally pay their employees—the pricefloor below which employees may not sell their labor. Most countries had introduced...
good's demand to its price. price elasticity of supply (PES) Measures the sensitivity of a good's supply to its price. pricefloor A market intervention...
monopoly pricing in the case of artificial scarcity, a positive or negative externality, a tax or subsidy, or a binding price ceiling or pricefloor such...
price. An example of a cap would be an agreement to receive a payment for each month the LIBOR rate exceeds 2.5%. Similarly, an interest rate floor is...
supported those who could no longer afford grains and bread once the pricefloor was in effect to support farmers. In his argument, for what is now free...
Confessions on a Dance Floor is the tenth studio album by American singer and songwriter Madonna. It was released on November 9, 2005, by Warner Bros...
between men and women for equal jobs, and has the potential of acting as a pricefloor on the salaries of men or women for particular jobs. Economists, such...
excessively low price causes a missed opportunity to cut emissions faster than planned. Instead, it might be better to have a pricefloor (a tax). This...
that efforts should be made to stabilize carbon prices, e.g., by having a price ceiling and a pricefloor. This led to the reforms outlined above in Phases...
Th Australian Wool Reserve Price Scheme (RPS) was a pricefloor scheme for wool that operated in Australia between 1970 and 2001. The scheme was set up...
methodology employed by floor traders and tape readers. It can also optionally include analysis of volume and level 2 quotes. A price action trader typically...
Government budget balance International taxation List of taxes Price ceiling Pricefloor Revolutionary tax Shadow economy Tax competition Tax exporting...
for anonymity, there is more opportunity to improve the price of a share if it goes to the floor. Investors maintain the right to select the method they...
The Price Company occupied the upper floors, and included a commissary on the sixteenth floor as well as a penthouse office suite for Harold Price Sr....
floor. There he would join other brokers and the specialist in the security being bought or sold and executes the trade at the best competitive price...
The Price Is Right is an American television game show where contestants compete by guessing the prices of merchandise to win cash and prizes. A 1972...