A minimal authorized worth established by a governing physique, under which alternate is prohibited, represents a selected kind of market intervention. For example, laws might dictate the bottom permissible worth for a specific agricultural product, similar to milk, aiming to help farmers’ incomes.
Such interventions are sometimes carried out to safeguard producers from market volatility and guarantee a fundamental degree of profitability. Traditionally, these measures have been used during times of financial hardship or overproduction to stabilize particular sectors. The intention is to forestall costs from falling to ranges that might trigger vital financial misery to these working throughout the focused trade.
