Option 1 -> Price floors cause excess SUPPLY, not excess demand, as the high minimum price discourages buyers.
Option 2 -> Correct definition of price floor.
Option 3 -> Price floor must be above equilibrium to be effective.
Option 4 -> Price floors protect producers by guaranteeing minimum income.
Hence, Option 1 -> Statement 1 is incorrect because a price floor (set above equilibrium) causes EXCESS SUPPLY, not excess demand. When the minimum price is artificially high, producers supply more but consumers demand less, creating a surplus. Black marketing is typically associated with price ceilings (maximum prices) where excess demand occurs, not with price floors. -> correct