Question

What is considered as one the largest and most contested Price Floor? Please answer economically.

Answer 1

A price floor is the lowest legal price that can be paid in a market for goods and services, labor, or financial capital.

Price floors are sometimes called price supports because they support a price by preventing it from falling below a certain level. Around the world, many countries have passed laws to create agricultural price supports. Basically largest price florring is seen on agriculture products where farm income are protected . Largest price flooring is set for farmers so that they can earn a minimum amount for them .  Farm prices, and thus farm incomes, fluctuate—sometimes widely. So even if, on average, farm incomes are adequate, some years they can be quite low. The purpose of price supports is to prevent these swings.

The most common way price supports work is that the government enters the market and buys up the product, adding to demand to keep prices higher than they otherwise would be.