When does a surplus occur?
Understand the Problem
The question is asking about the concept of surplus, particularly in an economic context, and when it arises. A surplus occurs when the quantity supplied of a good or service exceeds the quantity demanded at a given price, typically leading to excess inventory or unsold goods.
Answer
A surplus occurs when there is excess supply.
A surplus occurs when there is excess supply - that is when the quantity supplied is greater than the quantity demanded.
Answer for screen readers
A surplus occurs when there is excess supply - that is when the quantity supplied is greater than the quantity demanded.
More Information
A surplus can lead to price reductions as businesses try to sell off excess stock.
Tips
Common mistakes include confusing a surplus with a shortage. Remember a surplus is when supply exceeds demand, not vice versa.
Sources
- The web page with info on - Example Source - econport.org
- Equilibrium, Surplus, and Shortage | Microeconomics - courses.lumenlearning.com
- At what price does the shortage and surplus occur? Once a market ... - homework.study.com
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