Question

Explain which one of the above market control measures is applicable in the Labour market and justify why it is important to consider the effects of such action

Answer 1

I understand here the "above market control measures" to be prize floor and price ceiling.

In a Labor market, the prize floor is the relevant one: it makes sure that the products produced by the workers and their companies will not go below certain prize, which means that it provides a security of livelihood for the workers. However, it might scare people off from buying the product - and this is what is important to consider- it might be risky and result in not selling the product