Surplus (Market)
Plain definition
A market surplus exists when quantity supplied exceeds quantity demanded at the prevailing price — sellers offer more than buyers want. Surpluses push prices down and show up as unsold inventory, discounts, or idle capacity.
In economics
Surpluses occur whenever price sits above equilibrium: price floors (minimum wages, farm support prices), sudden demand collapses, or oversupply shocks. In a free market the surplus forces prices down toward equilibrium; when policy holds the price up, the surplus persists and must be bought, stored, or dumped by someone.
Example
A government sets a minimum wheat price of 2,400 rupees per quintal while the equilibrium is 2,000. Farmers grow more wheat, buyers purchase less, and the surplus grain piles up in warehouses — grain the government must then buy and store at public expense.
Do not confuse a market surplus with consumer surplus. A market surplus (excess supply) is a disequilibrium that pressures prices down. Consumer surplus is a welfare measure — the gain buyers enjoy from paying less than they were willing to pay. They are opposite in spirit: one is an imbalance, the other a benefit.