Price floor: Price ($/unit) 90 S... . Price cannot be lower than the floor price. 80 To be effective, the price floor must be set above the equilibrium price. 60 An effective price floor causes Excess Supply or a surplus. 40 For example, if the government sets a Price floor = $60, then Quantity 20 demanded = _ units and Quantity D supplied = _ units, causing a O surplus of units. 20 40 60 80 90 Widgets (units)