A floor price is the minimum price set for a product or service, below which it cannot be sold. This price acts as a safety net for businesses, ensuring that they do not suffer losses by selling their goods or services at extremely low prices. It also protects consumers from being charged exorbitant prices by creating a baseline for fair and competitive pricing. Floor prices are often used in industries with fluctuating market conditions, such as agriculture and energy, to stabilize prices and maintain a level of profitability for producers. In essence, a floor price serves as a safeguard against extreme price fluctuations and promotes a healthy balance between supply and demand in the market.