Price floors are a common strategy used to protect prices from being undercut by competitors.
This blog post will go over how this pricing strategy can be used in conjunction with price supports for your business.
A common misconception about using this strategy is that the government sets an unrealistically low minimum wage .
Then forces companies to pay their workers more than they can afford.
This will result in bankruptcies of many businesses or layoffs if not all industries were hit with such legislation.
The reality is that there would need to be some mechanism put into place by which employers could obtain funding from another source.
So as not have any negative effect on business owners who find themselves in this position.
Here’s how we do it: Firstly, firms establish a target profit margin – typically around 20% (the best number varies.
