How does the implementation of a price floor by the government affect consumer welfare in a market, and what potential welfare loss can occur as a result?

A price floor is a minimum price set by the government for a good or service, which means that it cannot be sold for less than this price. When a price floor is implemented, it can lead to higher prices for consumers, which might reduce their ability to buy as much of the product as they want. For example, if the government sets a price floor for milk, consumers may have to pay more, leading some to buy less milk or switch to alternatives. This situation can create a welfare loss because the higher prices mean that some consumers are unable to purchase the product at all, which reduces overall satisfaction in the market. In short, while the price floor aims to help producers by ensuring they earn a fair income, it can harm consumers by making goods less affordable.