Price Floor Benefits

But this is a control or limit on how low a price can be charged for any commodity.

Price floor benefits. A price floor is the lowest legal price a commodity can be sold at. They are used to increase the income of farmers producing goods it is obvious in this situation that by incresaseing the price above equilibrum governemt is assisting the producers and not the consumers a higher price is going to mean a higher income for the producer. Price floor are used to give producers a higher income. 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.

Price floors such as minimum wage benefits consumers by ensuring reason. For a price floor to be effective the minimum price has to be higher than the equilibrium price. Like price ceiling price floor is also a measure of price control imposed by the government. Price floors are also used often in agriculture to try to protect farmers.

Price floors are used by the government to prevent prices from being too low. The most common example of a price floor is the minimum wage. The most common price floor is the minimum wage the minimum price that can be payed for labor. In a perfect economy price ceilings and floors are inefficient and can be aruged it benefits no one.

The floor price must be set above the market equilibrium to be effective disadvantages.