Price Floor

Business, Legal & Accounting Glossary

Definition: Price Floor



Full Definition of Price Floor


price floor is the minimum amount for which a product or service can be sold. Price floors are often imposed by governments to protect the supplier of the product or service in question.

Sugar in the US

In the United States, the government has imposed price floors on sugar. This means that the sugar producers are guaranteed a minimum price for their sugar, regardless of what the market will pay.

If the price floor of sugar (imposed by the US government) is $100 per unit, and the market can only afford or is only willing to pay $90 per unit, the government will pay the suppliers the difference.

Additionally, the government will purchase any unsold sugar, thereby guaranteeing the sugar producers a minimum market.

Taxis in Singapore

Taxi fares in Singapore have both price floors and price ceilings. This means that the fares begin at a certain level above zero, but no higher.


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Price Floor. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/price-floor/ (accessed: October 19, 2020).
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Price Floor. PayrollHeaven.com. Retrieved October 19, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/price-floor/

Definition Sources


Definitions for Price Floor are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 27th March, 2020 | 0 Views.