A floor price is the minimum price set for a product or financial instrument, establishing a baseline below which it should not fall. It serves to protect sellers, ensuring they don’t incur losses below a specified threshold. Common in commodities, auctions, and financial markets, floor prices provide stability and risk mitigation. In retail, they can set a minimum acceptable selling price, safeguarding profitability. The concept acts as a protective measure, preventing prices from dropping to undesirable levels.

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