How does a price floor typically affect the market and producer behavior?

A price floor is a minimum price set by the government for a good or service, meaning sellers cannot charge less than this price. This usually leads to producers wanting to sell more because they can earn higher prices, but it can also result in a surplus of goods. For example, if the government sets a price floor on milk that is higher than the market price, farmers may produce more milk than consumers are willing to buy at that price. Consequently, this can lead to unsold milk piling up, which might force farmers to reduce production in the long run. Overall, while a price floor benefits some producers by ensuring they earn more, it can disrupt the balance of supply and demand in the market.