pricefloor
A price floor is a government- or group-imposed limit on how low a price can be charged for a product, good, commodity, or service. If the price is low enough, the market price will be above the price floor, and the price floor will not be binding. The market price will equalize and the price will be the equilibrium price. If the price is set above the equilibrium, the price floor will be binding and will cause a surplus.
Price floors are typically enacted to protect producers and suppliers by ensuring that the price of a
When a price floor is set above the equilibrium price, it creates a situation where the quantity