Editing Price controls (section)

==Price floor==

{{Main|Price floor}}
[[File:"Cost of Living 1918-1944" - NARA - 514088.jpg|thumb|250px|World War II poster about US price controls]]
[[File:Fight for $15 on 4-15 (17161520871).jpg|thumb|200px|Protesters call for an increased legal [[minimum wage]] as part of the "[[Fight for $15]]" effort to require a $15 per hour minimum wage in 2015. A government-set minimum wage is a price floor on the price of labour.]]
A price floor is a government- or group-imposed price control or limit on how low a price can be charged for a product,<ref>
{{cite web|url=http://dictionary.reference.com/browse/Price%20floor|title=Price floor – Definitions from Dictionary.com|publisher=dictionary.reference.com|access-date=2008-05-02}}</ref> good, commodity, or service. A price floor must be higher than the [[equilibrium price]] in order to be effective. The equilibrium price, commonly called the "market price", is the price where economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium) values of economic variables will not change, often described as the point at which quantity demanded and quantity supplied are equal (in a perfectly competitive market). Governments use price floors to keep certain prices from going too low. Two common price floors are [[minimum wage law]]s and [[supply management (Canada)|supply management]] in Canadian agriculture. Other price floors include regulated US airfares prior to 1978 and minimum price per-drink laws for alcohol. Since the [[credibility revolution]] starting in the 1990s, minimum wages have often found strong support among economists.<ref name=":0" /><ref name=":1" /><ref name=":2" /><ref name=":3" />

Advantages of a price floor are:
* May motivate producers to produce more.
* May prevent the fluctuation of prices of agricultural products.
* May reduce the over-exploitation of producers.
* May reduce poverty and increase productivity among employees (in minimum wages)

Disadvantages of a price floor are:
* Supply may exceed demand.
* Resources may be wasted.
* The government may be forced to buy the excess supply or it may be discarded (e.g., in an agricultural context).