Floor price
What is floor price?
Floor pricing is the least amount of value that a product can be
sold/bought legally by the country. It can occur not ONLY in
products, but services aswell.
What are examples of floor pricing? How does it occur? And what are the
uses/importance of floor pricing?
Floor pricing occurs when the government takes action on the prices of the
product/services. It helps prevent the prices of commodities and services to
crash more than it is.
Floor pricing is important to keep a commodity from crashing and from
corrupt sellers selling a price too high, products that are effected by floor
prices can have their prices increased but only by the amount paid by buyers
when the product or service is in elastic.
Some examples of products effected by floor pricing are:
Wheat, Rice, Meat, Diary products and Bread.