Price Floor
Definition
A legal minimum price. When set above the equilibrium price it binds — causing surpluses, as sellers want to sell more than buyers want to buy.
Example
Minimum wage is a price floor in the labor market.
A legal minimum price. When set above the equilibrium price it binds — causing surpluses, as sellers want to sell more than buyers want to buy.
Minimum wage is a price floor in the labor market.