a legal minimum that can be charged for a good
a minimum price that can be legally charged or paid, and is usually set at the behest of sellers
a situation where a price is set above the equilibrium price
A government-imposed minimum for the price of a particular good.
The lowest price at which it is legal to trade a particular good, service, or factor of production. The minimum wage is an example of a price floor. (p. 174)
A minimum price that is set so that the price of a resource, good and service will not be permitted, due to the forces of supply and demand to fall below the minimum. Price floors are sometimes set for agricultural products.
a government price control that sets the minimum allowable price for a good.
a minimum price below which market prices are not legally allowed to fall
A hedging concept that contractually establishes a minimum price to be paid for a security or commodity over a specified period of time. The price floor only applies when the market price is below the price floor. See also price cap.
a price above equilibrium legislated by the government which results in a surplus
A price floor is a regulation that makes it illegal to charge a price lower than a specified level. An "effective" price floor (above the equilibrium price) generally leads to a surplus, which is an unintended (but predictable) consequence.
A price floor is a government-imposed limit on how low a price can be charged for a product. For a price floor to be effective, it must be greater than the equilibrium price. In the first graph at right, the supply and demand curves intersect to determine the free-market quantity and price.
