price floor

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Related to Price Floors: Price ceiling, Consumer surplus

Price Floor

The lowest price for a good or service permitted by a government. A government may impose a price floor to protect a favored industry and/or to keep employees working at a reasonable wage. Price floors are particularly common in agriculture. Many economists believe setting price floors is economically inefficient and limits demand in the market, causing an oversupply of the controlled good or service.

price floor

the minimum PRICE that can be charged for a PRODUCT as determined by the government. Contrast PRICE CEILING. See PRICE CONTROLS, PRICE SUPPORT, MINIMUM WAGE RATE, COMMON AGRICULTURAL POLICY.
References in periodicals archive ?
Section III discusses how price floors can be used strategically by rivals to peg downstream prices at artificially high levels and thereby realize a competitive advantage.
L], which is a price floor defended by government stock purchases.
23) The incremental block of output that is appropriate for establishing competitive price floors will generally differ from the "entire quantity" of demand used to compute TELRIC estimates.
The imputation methodology leads to the following imputation rule: price floors are determined by summing the incremental cost of the LEC's service and the contribution (price - incremental cost) contained in the price of monopoly building blocks the competitors buy to provide a competitive service, as shown in the formula below where PL is the price for the LEC's competitive service, ICL is the corresponding incremental cost, PA is the rate for the access service (monopoly building block) used by competitors and ICA is its corresponding cost:
373 (1911) in which the Supreme Court established the rule that it is per se illegal for manufacturers to set minimum price floors for resellers of their products.
These collars cover 70 MMcf/d, with a price floor of $2.
Denbury" or the "Company") today reported that the natural gas price floors that the Company has with Enron include a price floor for 2002 with a strike price of $4.
0 million of costs associated with the price floors in accordance with Financial Accounting Standard No.
The Company's existing natural gas price floors have an average price of approximately $3.
This PV-10 value excludes any benefit that may be derived from the higher price floors that Denbury has purchased relating to this acquisition.
Although the acquisition initially appears to have a high finding cost above our historical levels, with our price floors protecting any unforeseen commodity price weakness and the upside potential that our engineers and geologists have already identified, we expect to show an excellent rate of return on these acquisitions.