A minimal authorized value established by a governing physique, beneath which alternate is prohibited, represents a particular kind of market intervention. For example, laws may dictate the bottom permissible value for a specific agricultural product, reminiscent of milk, aiming to help farmers’ incomes.
Such interventions are sometimes carried out 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 stop costs from falling to ranges that would trigger important financial misery to these working throughout the focused business.
