Supply surplus

Supply surplus exists in a market where the price is higher than the equilibrium price. A supply surplus can occur on a market if the price is regulated.

A supply surplus means that sellers want to sell larger quantities than buyers are willing to buy at the given market price. An excess supply can mean a waste of resources and that the market not is functioning effectively. Examples of excess supply may be in the market for agricultural products where a country wants to be self-sufficient in food.