In response to a surplus the market price of a good will fall; as the price falls, the quantity demanded will increase and quantity supplied will decrease until equilibrium is reached.

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Quizplus · Accepted Answer

This is the basic law of supply and demand. When there is an excess supply of a good, the market price will decrease to entice buyers to purchase more, and to discourage suppliers from producing more. As the price falls, the quantity demanded will increase as buyers are willing to purchase more, and the quantity supplied will decrease as suppliers find it less profitable to produce more. Eventually, an equilibrium will be reached where the quantity demanded and quantity supplied are equal, and the market price stabilizes.

In Response to a Surplus the Market Price of a Good