<PRICE FLOOR> 

• As mentioned the volatility and inelastic nature of the supply & demand of agricultural commodities mean the income that farmers receive is highly unpredictable. As such, governments often impose minimum prices, and directly purchase the surplus, so as to guarantee the farmer's income. 

• CS falls from 'abc' to 'a'

• PS rises from 'def' to defbcg', so TSS rises by 'g'

• GOV'T SPEND is area 'cgheij' , overall loss to society is 'cgheij' minus 'g' = 'cheij'

Consumers are worse off, as they must now pay a higher price for the good (Pf > Pe), while they buy a smaller quantity of it (Qd < Qe). This is clear also from their loss of some consumer surplus.

Producers gain as they receive a higher price and produce a larger quantity, and since the government buys up the surplus, they increase their revenues from Pe × Qe to Pf × Qs. Remember, this is the main rationale of agricultural price floors. Also, producers become protected against low-cost competition and do not face as strong incentives to become efficient producers; they are therefore less likely to go out of business if they are producing inefficiently (with higher costs).

Workers are likely to gain as employment increases on account of greater production of the good.

When the government buys the excess supply, this is a burden on its budget, resulting in less government funds to spend on other desirable activities in the economy. The costs to the government are paid for out of taxes (and therefore by taxpayers). In addition, there are further costs of storing the surplus or subsidising it for export (sale to other countries).

Stakeholders in other countries such as the European Union, the United States and many other more developed countries rely on price floors for agricultural products to support their farmers. The surpluses are sometimes exported (sold to other countries), leading to lower world prices due to the extra supply made available in world markets. Countries that do not have price supports are forced to sell their agricultural products at low world prices. The low prices in these countries signal to local farmers that they should cut back on their production, resulting in an underallocation of resources to these products.

These events often work against the interests of less developed countries If excess supplies of agricultural products are used as aid to developing countries, they are sold at low (below-market) prices in local markets. Consumers of those countries gain, as they buy the good at a lower than market price, but producers lose as they have to compete with lower-priced foreign goods, and some of them may go out of business, losing their only source of income 

Overall, a global misallocation of resources can result, as price floors cause high-cost producers to produce more and low-cost producers to produce less than the social optimum, resulting in a waste of resources.

• A MINIMUM WAGE is a piece of LEGISLATION SET BY GOVERNMENT that stipulates a MINIMUM PER/HOUR RATE OF PAYMENT.

• https://wageindicator.org/salary/minimum-wage/minimum-wages-per-country

• https://tradingeconomics.com/country-list/minimum-wages

• The minimum wage RAISES THE COSTS OF PRODUCTION for users of low skilled workers, which reduces their willingness to supply their product, CREATING UNDERPRODUCTION, 

• In addition, the labour market doesn't clear, leaving a surplus of labour, and UNEMPLOYMENT INCREASES. 

• Furthermore, we see the EMERGENCE OF A BLACK MARKET for illegal workshops and underpayment.

• Finally, it is often the case that the QUALITY OF THE LABOUR INCREASES, as the LIMITED JOBS AVAILABLE compels workers to BECOME MORE COMPETITIVE, in order to be more ATTRACTIVE TO EMPLOYERS given the SURPLUS.