Econ 101 Price Floor

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Econ 101 price floor.

This is a combination of news items. 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. Class note uploaded on feb 26 2015. A price floor is an established lower boundary on the price of a commodity in the market.

A price floor is the lowest legal price a commodity can be sold at. Principles of microeconomics has been evaluated and recommended for 3 semester hours and may be transferred to over 2 000 colleges and universities. Final exam ch. For a price floor to be effective the minimum price has to be higher than the equilibrium price.

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. The most common price floor is the minimum wage the minimum price that can be payed for labor. Price floors defines minimum price price ceilings. Course summary economics 101.

Course video minimum wage you can find this in the video section. The most common example of a price floor is the minimum wage. Textbook chapter 6 2.