(Figure: Determining Surplus and Loss) In the graph, if the government sets a minimum price of $12, this is an example of a binding price floor.

Name: (Figure: Determining Surplus and Loss) In the graph, if the government sets a minimum price of $12, this is an example of a binding price floor.
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A binding price floor means that the government has set a minimum price above the equilibrium price, which results in a surplus of goods. In this case, a minimum price of $12 would cause a surplus of Q2-Q1.

(Figure: Determining Surplus and Loss) in the Graph, If the Government