Price Ceiling Minimum Wage

1st jan 1970 economics reference this.

Price ceiling minimum wage. It is the lowest price that can be paid for an hour of work. Before the minimum wage striking workers could always be replaced by workers who were willing to work. 1377 words 6 pages essay.

But if minimum wage is set above market price employers may distribute more work among few workers and terminate rest of the workers in order to not to pay more wage to more workers. For more on the minimum wage see 3 reasons the 15 minimum wage is a bad way to help the poor. When the minimum wage is set above the equilibrium market.

If minimum wage is set below the market price no effect is seen. Before considering an example of price floors minimum wages let s examine the problem in general terms. A price ceiling is the price that called price cap which is a government regulation that places an upper limit on the price at which a particular good service or factor of production may be traded.

Price ceiling and the minimum wage economics essay. The federal minimum wage at the end of 2014 was 7 25 per hour which yields an income for a single person slightly higher than the poverty line. A minimum wage is a price floor.

An example of a price floor is minimum wage laws where the government sets out the minimum hourly rate that can be paid for labour. For this to have an effect on market the price ceiling must be placed above the natural market price. The federal minimum wage at the end of 2014 was 7 25 per hour which yields an income for a single person slightly higher than the poverty line.

It is known as minimum price or price floor when the government sets a minimum legal limit of a price of a particular good or service. The most common example of a price floor is the minimum wage. The recent successful state and local efforts to increase the minimum wage more than doubling the current federal minimum wage of 7 25 per hour in some instances is reviving the notion that government can arbitrarily set the price of goods and services including workers labor with little or no economic downside.