A government sometimes creates an excess supply of a product by setting a minimum price at which the product may be sold to consumers. This is sometimes called a

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A price floor is a government-imposed minimum price at which a good or service can be sold, which may result in an excess supply or surplus of that product. This is because the minimum price may be higher than what consumers are willing to pay for the product, leading to a situation where suppliers produce more of the product than there is demand for. This can also lead to stocks of the product being stored and not sold, adding to the surplus.

A Government Sometimes Creates an Excess Supply of a Product