Define Business Price Floor

Limit beyond which a cost will not be allowed to fall.

Define business price floor.

Dictionary term of the day articles subjects businessdictionary. The opposite of a price ceiling is a price floor which sets a minimum price at which a product or service can be sold. This control may be higher or lower than the equilibrium price that the market determines for demand and supply. A lower limit set by a government on the price that can be charged for a product or service.

Price floor has been found to be of great importance in the labour wage market. Floors in wages. 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. The lowest preconceived price that a seller will accept.

Price floor is a situation when the price charged is more than or less than the equilibrium price determined by market forces of demand and supply. A price floor must be higher than the equilibrium price in order to be effective. Definition of price floor. Real life example of a price ceiling.

Minimum wage is an example of a wage floor and functions as a minimum price per hour that a worker must be paid as determined by federal and state governments.