A price floor is a minimum price set by the government or an authority for a particular good or service. This regulation prevents prices from falling below a certain level, ensuring that producers can cover their costs and maintain a stable income. Common examples of price floors include minimum wage laws and agricultural price supports. When a price floor is established, it can lead to a surplus if the minimum price is above the market equilibrium price. This means that the quantity supplied exceeds the quantity demanded, resulting in unsold goods or services. Price floors aim to protect producers but can also create market imbalances.