Surplus
Definition. A surplus is a situation in which the quantity supplied of a good exceeds the quantity demanded at the prevailing price, leaving some output unsold. It arises when the price is held above the equilibrium price, for example by an effective minimum price or price floor.
In a free market a surplus puts downward pressure on price, eliminating the excess supply, but a binding minimum price prevents this. The government may then have to buy up or store the unsold surplus.
This term belongs to Price Controls: Ceilings and Floors in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
Want to use surplus for marks in the exam? Learn it in class or message the team.