When the quantity supplied of a good exceeds the quantity demanded, there is a surplus.
A surplus exists if the quantity supplied of a good or service exceeds the quantity demanded at the current price. Thus, this causes a downward pressure on price. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged.
When there is a surplus in the economy, suppliers push prices down to increase sales. In the process, the fall in prices reduces the quantity supplied and increases the quantity demanded, thus eventually eliminating the surplus.
Hence, a surplus is when the quantity supplied of a good exceeds the quantity demanded.
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