A Price Floor Is A Legally Imposed Price

The price floor acts as a minimum price that constrains the market price if the equilibrium market price would have been below the ceiling absent market intervention.

A price floor is a legally imposed price.

If the state of pennsylvania increases its. Question 2 a price floor is a legally imposed price. Although both a price ceiling and a price floor can be imposed the government usually only selects either a ceiling or a floor for particular goods or services. A price floor provides a bottom limit think of a physical floor in a room for a price.

Suppose 20 000 people in pennsylvania work in fast food restaurants for the federal minimum wage of 7 25 hour. A price floor is the lowest price that one can legally charge for some good or service. A price floor must be higher than the equilibrium price in order to be effective. A price ceiling is the legal maximum price for a good or service while a price floor is the legal minimum price.

A price floor is a legally imposed price. 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. The price floor acts as a minimum price that constrains the market price if the equilibrium market price would have been below the ceiling absent market intervention. Assume that all fast food restaurants employ many minimum wage workers.

A price ceiling is a legally imposed price. A price floor is a legally imposed price.