What is the primary effect of implementing a binding price floor in a perfectly competitive market?

A binding price floor is a minimum price set by the government that is above the market equilibrium price. When this happens in a perfectly competitive market, it means that sellers cannot sell their products for less than this set price. As a result, the quantity of goods supplied increases because producers are willing to sell more at the higher price, but the quantity demanded decreases since consumers may not be willing to buy as much at that price. This creates a surplus, where there are more goods available than people want to buy. For example, if a price floor is set on wheat, farmers might grow more wheat because of the higher price, but consumers may buy less, leading to unsold wheat in stores.