An Effective Price Floor Will. A price floor is most effective when is it placed above the equilibrium point as this would force prices to increase from the existing equilibrium to the desire price. An example of a price floor are minimum.
A price ceiling keeps a price from rising above a certain level the ceiling while a price floor keeps a price from falling below a certain level the floor. Refer to the graph shown. A price floor or a minimum price is a regulatory tool used by the government.
A price ceiling keeps a price from rising above a certain level the ceiling while a price floor keeps a price from falling below a certain level the floor.
What impact does an ineffective price floor have on the market. Price floor is enforced with an only intention of assisting producers. A price ceiling keeps a price from rising above a certain level the ceiling while a price floor keeps a price from falling below a certain level the floor. A price floor must be higher than the equilibrium price in order to be effective.
