Miinimumhindade

Miinimumhindade, often translated as minimum prices or price floors, are a government-imposed limit on how low a price can be charged for a good or service. This is typically set above the equilibrium price that would naturally occur in a free market. The primary intention behind implementing minimum prices is often to protect producers by ensuring they receive a certain level of income, thereby safeguarding their livelihoods and encouraging continued production.

Minimum prices are commonly seen in agricultural markets, where governments may set a floor price for certain crops or livestock to prevent producers from suffering significant losses during periods of oversupply or low demand. Another area where minimum prices are applied is in the labor market through the concept of minimum wage, which sets a lowest hourly rate that employers can legally pay their workers.

While intended to support producers, minimum prices can have unintended consequences. If the minimum price is set significantly above the equilibrium price, it can lead to a surplus of the good or service, as producers are incentivized to supply more than consumers are willing to buy at that elevated price. This surplus may need to be purchased by the government, leading to storage costs and potential waste. In the case of minimum wage, it can potentially lead to reduced employment if businesses find it too costly to hire labor at the mandated rate.