Examples Of Price Floors. Youll notice that the price floor is above the equilibrium price which is 200 in this example. Typical examples include minimum wage agricultural support price and price agreed by an oligopoly.
Definition Examples The Minimum Wage. Perhaps the best-known example of a price floor is the minimum wage which is based on the view that someone working full time should be able to afford a basic standard of living. The minimum wage is one of the.
A price floor is a minimum price enforced in a market by a government or self-imposed by a group.
By observation it has been found that lower price floors are ineffective. The federal minimum wage in 2016 was 725 per hour although some states and localities have a higher minimum wage. Any employer that pays their employees less than the specified amounts can be prosecuted for a breach of minimum wage laws. Many agricultural goods have price floors imposed by the government.
