Price Floor (Noun)
Meaning
Floor below which prices are not allowed to fall; "the government used price supports to maintain the price floor".
Classification
Nouns denoting communicative processes and contents.
Examples
- The government set a price floor for wheat to protect farmers from market fluctuations and ensure a minimum income.
- A price floor is often implemented to prevent prices from dropping too low and causing economic instability.
- The airline industry has a price floor in place to prevent airlines from undercutting each other and driving prices too low.
- The price floor for the new smartphone was set at $500 to maintain profit margins and prevent price wars.
- By setting a price floor, the government can prevent companies from engaging in predatory pricing and maintain fair competition.