A regulation, either by the government or by other governing bodies, that prohibits the payment of less than a set price for a good or service. A good example of this would be minimum wage.

In terms of microeconomics, the set price floor has to be set above the equilibrium price or it would do nothing. As a result of placing a fixed price above the equilibrium price, there is less of a demand and more willingness for supply. As a result, this creates a surplus.

While it does have its perks, it is considered as one obstacle to production efficiency. By creating a surplus and working outside the equilibrium point, it creates a deadweight loss, and becomes a social loss.