A minimal authorized value established by a governing physique, beneath which change is prohibited, represents a selected sort of market intervention. As an illustration, laws might dictate the bottom permissible value for a specific agricultural product, corresponding to milk, aiming to assist farmers’ incomes.
Such interventions are sometimes applied to safeguard producers from market volatility and guarantee a primary 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 would trigger vital financial misery to these working throughout the focused business.
