How do price floors potentially impact consumers?

Price floors are government-imposed limits on how low a price can be charged for a product. When a price floor is set above the equilibrium price, it can lead to price increases for consumers since sellers cannot sell the product for less than the established floor. This means consumers end up paying higher prices for those goods than they would in a free market situation, where supply and demand determine prices naturally.

In addition to higher prices, price floors can result in reduced choices. When prices are artificially maintained above equilibrium, it can cause excess supply (where supply exceeds demand). Some producers may produce more because they are getting higher prices, but consumers may not buy as much at those prices, leading to potential shortages of other products or decreased product diversity in the market.

Therefore, the correct choice highlights that price floors can both lead to higher prices and limit consumer choices, as consumers will either pay more or may find fewer products available at those high prices.