The market experiences surplus supply when a binding price floor is implemented. In other words, there is more supply than demand. If the price floor is lifted, the market price begins to decline and will do so until it reaches the equilibrium level.
It is forbidden to purchase and sell at the equilibrium price or any other price that is lower than the price floor when there is a binding price floor. Non-binding price floors are those that are set below the equilibrium price.
There will be no change in the cost or availability of the product on the legal market. There may be a shortage if the supply is insufficient to meet demand if the price ceiling is set below the equilibrium price.
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