A minimal authorized worth established by a governing physique, under which change is prohibited, represents a selected kind of market intervention. As an illustration, laws might dictate the bottom permissible worth for a selected agricultural product, resembling milk, aiming to help farmers’ incomes.
Such interventions are sometimes applied to safeguard producers from market volatility and guarantee a primary stage of profitability. Traditionally, these measures have been used in periods of financial hardship or overproduction to stabilize particular sectors. The intention is to forestall costs from falling to ranges that would trigger important financial misery to these working inside the focused business.
