An Example Of A Price Floor Would Be The Government Setting The Price Of Sugar

There will be a shortage of coffee.

An example of a price floor would be the government setting the price of sugar. The equilibrium price commonly called the market price is the price where economic forces such as supply and demand are balanced and in the absence of external. Industry body indian sugar mills association thought welcomed the cabinet s decisions of extending a package of rs 8 500 crore to help the sugar mills and cane farmers it said that it may not impact retail prices significantly the decision to fix a minimum ex mill sale price of sugar at rs 29 per kilo will improve ex mill prices from current levels of around rs. For example many governments intervene by establishing price floors to ensure that farmers make enough money by guaranteeing a minimum price that their goods can be sold for. Another example of a price ceiling involved the coulter law regarding the vfl in australia.

Any employer that pays their employees less than the specified amounts can be prosecuted for a breach of minimum wage laws. For example the uk government set the price floor in the labor market for workers above the age of 25 at 7 83 per hour and for workers between the ages of 21 and 24 at 7 38 per hour. However it resulted in a shortage due to increased demand. 28 per kilo but may not.

For a price floor to be effective the minimum price has to be higher than the equilibrium price. A price floor must be higher than the equilibrium price in order to be effective. 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 most common example of a price floor is the minimum wage.

This law introduced a ceiling wage of 3 in 1925 but it was later abolished in 1968.