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

A price floor is a minimum price set by the government for a good or service, and it is usually above the market equilibrium price. When a price floor is established, it can lead to a surplus because the higher price encourages producers to supply more of the good, but consumers may buy less due to the increased cost. For example, if the government sets a price floor on milk that is higher than what people are willing to pay, farmers will produce more milk, but some consumers might decide to buy less or switch to other beverages. This can result in excess milk that goes unsold, leading to wasted resources. Overall, a price floor can disrupt the natural balance of supply and demand, causing producers to change their behavior based on the new price.