price floor

Price floors seem to be a somewhat ineffective regulator when considered for general products. However, they appear to be effective when applied to minimum wage or gasoline. By setting a price floor for gasoline, the demand and supply are able to remain above the demand equilibrium. This is important because if there was not enough gasoline to go around, people (in mass quantities) would get very upset very fast. If there wasn't a price floor for a products such as gasoline, there would be lines and lines of people by the thousands to stock up on gasoline if it dropped dramatically in price. By initiating a price floor for minimum wage or gasoline, supply and demand are able to stay high enough that there is not a shortage of an important product which fuels the economy so directly, and in some cases, literally.