Answer:
sets a price floor above the equilibrium price.
Explanation:
Price floor is defined as a government imposed price regime that sets the minimum amount that suppliers can charge buyers for a particular good.
Suppliers are not allowed to charge below this price. For this strategy to be effective it needs to be a price that is above equillibrum price.
When price floor is above equillibrum price quantity supplied exceeds quantity demanded. This results in a surplus of goods and services.
The surplus effect is illustrated in the attached diagram.
