Define Business Price Floor

Minimum wage is an example of a wage floor and functions as a minimum price per hour that a worker must be paid as determined by federal and state governments.

Define business price floor.

Real life example of a price ceiling. A price floor must be higher than the equilibrium price in order to be effective. A lower limit set by a government on the price that can be charged for a product or service. By observation it has been found that lower price floors are ineffective.

The lowest preconceived price that a seller will accept. Price floor is a situation when the price charged is more than or less than the equilibrium price determined by market forces of demand and supply. Floors in wages. Definition of price floor.

Price floor is a price control typically set by the government that limits the minimum price a company is allows to charge for a product or service its aim is to increase companies interest in manufacturing the product and increase the overall supply in the market place. Limit beyond which a cost will not be allowed to fall. A price floor 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. This control may be higher or lower than the equilibrium price that the market determines for demand and supply.

The opposite of a price ceiling is a price floor which sets a minimum price at which a product or service can be sold.