A term used when the quantity of goods supplied exceeds the quantity demanded at the existing price.

A term used when the quantity of goods supplied exceeds the quantity demanded at the existing price.

• A. Shortage
• B. Surplus
• C. Equilibrium
• D. Attainment

Answer: (B)

Excess supply, or surplus, occurs when the quantity of goods supplied exceeds the quantity demanded at the current price. In this situation, producers are willing to sell more than buyers are willing to buy, which puts downward pressure on price as sellers try to clear the extra inventory and move the market toward balance. A shortage would be the opposite, with demand exceeding supply; equilibrium is the point where supply equals demand; attainment isn’t the standard term used here.

Excess supply, or surplus, occurs when the quantity of goods supplied exceeds the quantity demanded at the current price. In this situation, producers are willing to sell more than buyers are willing to buy, which puts downward pressure on price as sellers try to clear the extra inventory and move the market toward balance. A shortage would be the opposite, with demand exceeding supply; equilibrium is the point where supply equals demand; attainment isn’t the standard term used here.