A Price Floor Is A Legally Mandated

A price ceiling is the legal maximum price for a good or service while a price floor is the legal minimum price.

A price floor is a legally mandated.

A price floor is a legally mandated minimum price imposed on a market. A minimum wage is the lowest wage per hour that a worker may be paid as mandated by federal law. Buyers and sellers are prevented from exchanging the good at any price below the legal minimum. Minimum price at which all units of the good must be legally sold.

The government has mandated a minimum price but the market already bears and is using a higher price. In the first graph at right the dashed green line represents a price floor set below the free market price. In this case the floor has no practical effect. 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 the lowest price that one can legally charge for some good or service. The minimum wage is a legally mandated price floor on hourly wages below which non. Maximum price above which legal trades cannot be made. A price floor is a government mandated a.

A price floor could be set below the free market equilibrium price. National and local governments sometimes implement price controls legal minimum or maximum prices for specific goods or services to attempt managing the economy by direct intervention price controls can be price ceilings or price floors.