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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.

Price floors produce.

Any employer that pays their employees less than the specified. Price floors are sometimes called price supports because they support a price by preventing it from falling below a certain level. By observation it has been found that lower price floors are ineffective. So even if on average farm incomes are adequate some.

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. Since the equilibrium price p e is below the minimum price p f i e. 210 the price floor is going to affect the market. Price floors are also used often in agriculture to try to protect farmers.

Price floor has been found to be of great importance in the labour wage market. The price floors are established through minimum wage laws which set a lower limit for wages. Farm prices and thus farm incomes fluctuate sometimes widely. This will result in excess supply which equals q f minus q d.

Price floors are used by the government to prevent prices from being too low. At price 210 per metric ton farmers are happy to produce quantity q f but the consumers demand only q d. The most common price floor is the minimum wage the minimum price that can be payed for labor.

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