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An example of a price floor is minimum wage laws, where the government sets out the minimum hourly rate that can be paid for labour. In this case, the wage is the price of labour, and employees are the suppliers of labor and the company is the consumer of employees' labour.
A government-set minimum wage is a price floor on the price of labour. A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product, [21] good, commodity, or service. A price floor must be higher than the equilibrium price in order to be effective. The equilibrium price, commonly called ...
For example, manufacturers and retailers may conspire to sell at a common "retail" price; set a common minimum sales price, where sellers agree not to discount the sales price below the agreed-to minimum price; buy the product from a supplier at a specified maximum price; adhere to a price book or list price; engage in cooperative price ...
A price support scheme can also be an agreement set in order by the government, where the government agrees to purchase the surplus of at a minimum price. For example, if a price floor were set in place for agricultural wheat commodities, the government would be forced to purchase the resulting surplus from the wheat farmers (thereby ...
Resale price maintenance (RPM) or, occasionally, retail price maintenance is the practice whereby a manufacturer and its distributors agree that the distributors will sell the manufacturer's product at certain prices (resale price maintenance), at or above a price floor (minimum resale price maintenance) or at or below a price ceiling (maximum resale price maintenance).
A minimum (floor) price may be set, and/or a suggested price may be indicated as guidance for the buyer. The buyer can select an amount higher or lower than the standard price for the commodity. [ 3 ] [ 4 ] Many common PWYW models set the price prior to a purchase ( ex ante ), but some defer price-setting until after the experience of ...
These purchase prices are set high enough to enable dairy processors to pay farmers at least the support price for the milk they use in manufacturing these products. The 2002 farm bill (P.L. 107-171, Sec. 1501) mandated a support price of $9.90/ cwt , effective through December 31, 2007, when the program by law was scheduled to expire.
In economics, willingness to accept (WTA) is the minimum monetary amount that а person is willing to accept to sell a good or service, or to bear a negative externality, such as pollution. [1] This is in contrast to willingness to pay ( WTP ), which is the maximum amount of money a consumer (a buyer ) is willing to sacrifice to purchase a good ...