Econ 101 Price Floor

The most common price floor is the minimum wage the minimum price that can be payed for labor.

Econ 101 price floor.

Course video minimum wage you can find this in the video section. Class note uploaded on feb 26 2015. 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. Final exam ch.

Download this econ 101 class note to get exam ready in less time. Price floors are also used often in agriculture to try to protect farmers. A price floor is an established lower boundary on the price of a commodity in the market. Principles of microeconomics has been evaluated and recommended for 3 semester hours and may be transferred to over 2 000 colleges and universities.

For a price floor to be effective the minimum price has to be higher than the equilibrium price. Price floors are used by the government to prevent prices from being too low. Course summary economics 101. The most common example of a price floor is the minimum wage.

Textbook chapter 6 2. A price floor is the lowest legal price a commodity can be sold at. 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.