Exporter or Importer?
Woolworths are importers as they demand goods worldwide to resell at their stores. However, Woolworths is a supermarket giant and has heavily relied on cheap imports to sustain their operation and profits of their firms from countries such as Thailand and South Africa. To protect these farmers or producers from Thailand and South Africa, the government may intervene in the market to impose a price floor. Big firms such as Woolworths drive prices so low that farming becomes unprofitable and it interferes with their standard of living. The government sees agricultural goods as a merit good so by setting a price floor, it encourages farmers to continue to produce (incentives) goods that society heavily rely on by making it profitable. If the price floor is imposed, it negatively impacts Woolworths as they cannot maximise profits.