What Is a Price Limit?

Limit price, the price specified in the limit price instruction refers to the highest purchase price (that is, the highest limit price) or the lowest sell price (that is, the lowest limit price) of the transaction instruction.

[xiàn jià]

State price limits imposed on certain commodities. It is a means for the state to intervene in prices. Divided into

In foreign trade, the state stipulates the maximum or minimum price of imported and exported goods as one of the conditions for measuring whether the goods can be imported or exported. Limit prices are also used in contracts for foreign trade.

The characteristic of the highest limit price is lower than the market equilibrium price

The floor price is characterized by higher than market equilibrium prices.

At present, there are many price-limit actions in the market to prevent low-price competition. Limit the lowest price. There are very few restrictions on the highest price. But limiting the minimum price is a healthy way to compete.

The long-term implementation of the maximum price limit will cause continuous shortage of supply of goods, and the long-term implementation of the minimum price limit will cause oversupply of goods, both of which will adversely affect the normal market supply and demand relationship.