What is a surplus?
Occurs in a market when the quantity supplied exceeds the quantity demanded, or when the product’s price is above the equilibrium price.
A surplus is an economic term that describes a situation where a certain quantity of a particular good or service is produced or provided in excess of the amount that people are willing or able to purchase. In other words, a surplus occurs when the supply of a good or service exceeds the demand for it in the marketplace. This can result in lower prices, reduced profit margins for producers, and a buildup of excess inventory which may require costly storage or disposal. On the other hand, when demand exceeds supply, a shortage occurs, which can result in higher prices, increased competition among buyers, and difficulty in finding the desired product or service.
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