What is a real life example of a price floor?

Answer 1

A real-life example of a price floor is the minimum wage set by governments for workers. For instance, in the United States, the federal minimum wage is $7.25 per hour. This regulation ensures that employers cannot pay workers less than this amount, aiming to provide a basic standard of living. However, while it helps some workers earn a livable wage, it can also lead to increased unemployment if businesses cannot afford to hire as many employees at the higher wage.