What is a price floor?

A price floor is an established lower boundary on the price of a commodity in the market. Governments usually set up a price floor in order to ensure that the market price of a commodity does not fall below a level that would threaten the financial existence of producers of the commodity. 1. Binding Price Floor

How do collectors change the floor price?

Collectors can change the floor price by buying an NFT from the floor. A common tactic to raise the floor price is called a floor sweep—where someone buys multiple NFTs to increase the floor. As for how the floor price is determined, there are several factors that play a role.

What is NFT floor price?

NFT floor price is the lowest ‘Buy Now’ price of a token in a specific collection. For example, if the floor price is 1 ETH, the cheapest you can buy an NFT from that collection is 1 ETH. The floor price doesn’t take into account the lowest bid price.

What is the effect of a price floor on producers?

The effect of a price floor on producers is ambiguous. Producers may be better off, no different, or worse off as a result of the measure. The effect of a price floor on consumers is more straightforward. Consumers never gain from the measure; they may be worse off or no different. Governments usually set up price floors to assist producers.