vähimmäishinta

Vähimmäishinta, often translated as minimum price or price floor, is a governmental or group-imposed limit on how low a price can be charged for a product or service. It is typically set above the market equilibrium price, meaning the price at which supply and demand would naturally meet. The primary purpose of a vähimmäishinta is to protect producers or sellers by ensuring they receive a certain level of income for their goods or services, preventing prices from falling too low.

A common example of a vähimmäishinta is found in agricultural markets, where governments may set minimum prices for crops like milk or grain. This aims to stabilize farmer incomes and prevent them from going out of business due to fluctuating market prices. In some labor markets, a minimum wage can be considered a form of vähimmäishinta for labor.

When a vähimmäishinta is set above the equilibrium price, it can lead to a surplus of the good or service. This is because at the higher mandated price, producers are willing to supply more than consumers are willing to buy. The government may then need to intervene further, for instance, by purchasing the excess supply to maintain the price floor. Conversely, if the vähimmäishinta is set below the equilibrium price, it has no effect on the market and is therefore non-binding.