A surplus exists
A) in equilibrium.
B) when quantity supplied is greater than quantity demanded.
C) when quantity supplied is less that quantity demanded.
D) at the market clearing price.

Question

Quizplus · Accepted Answer

A surplus occurs when the quantity supplied is greater than the quantity demanded, i.e. there is excess supply in the market. This typically results in a downward pressure on price as sellers try to get rid of their excess inventory. In contrast, equilibrium occurs when quantity supplied equals quantity demanded, so there is no surplus or shortage in the market.

A Surplus Exists