A price floor is a minimum price set by the government or an authority for a particular good or service. It prevents prices from falling below a certain level, ensuring that producers receive a fair income. For example, in the case of minimum wage, a price floor ensures that workers earn a basic level of pay. When a price floor is established, it can lead to excess supply if the price is set above the market equilibrium. This means that more of the good or service is available than consumers are willing to buy at that price. This situation can create surpluses, affecting the overall market dynamics.