According to our textbook, a price floor is a government-imposed limit on how low a price can be charged. I found an article on the agriculture law website that illustrates this concept. The article is titled “Dairy Income to Suffer, Says Federation.”
The effects of the USDA decreasing the level of the dairy price support program are large for farmers. Interestingly, the effects of lowering the levels of the program go far beyond just milk (i.e. how/where to store excess butter). According to the article, the USDA decision will also cause additional sales of surplus cheese to the government; consequently, the different class levels (milk, cheese, butter, etc.) will be affected as well.
With this price floor, just like the minimum wage example in the book, some people are being helped by this new policy and some people are being hurt by it. However, the question then must be asked…is it worth it? Are we sacrificing the inferior for the superior? Or is the government doing more harm then good?