The equilibrium price is raised to a binding price floor. It is binding because it calls for a change in equilibrium and a different distribution of resources.
The lowest price that can be legitimately charged for a good or service is known as a price floor. The minimum wage, which is founded on the idea that someone working a full-time job should be able to afford a basic level of living, is possibly the best-known example of a price floor.
An fixed lower limit on a commodity's market price is known as a price floor. In order to prevent a commodity's market price from falling too low and endangering the producers' ability to make a living, governments typically create a price floor.
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