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Effects of Surplus definitions

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  • Surplus
    Occurs when the market price exceeds equilibrium, causing quantity supplied to surpass quantity demanded and resulting in excess supply.
  • Equilibrium Price
    The price at which the demand and supply curves intersect, ensuring quantity supplied equals quantity demanded.
  • Quantity Supplied
    The amount producers are willing to offer at a specific price, shown as a point on the supply curve.
  • Quantity Demanded
    The amount consumers are willing to purchase at a specific price, represented as a point on the demand curve.
  • Excess Supply
    The portion of goods remaining unsold when quantity supplied is greater than quantity demanded at a given price.
  • Demand Curve
    A graphical representation showing the relationship between price and the quantity consumers wish to buy.
  • Supply Curve
    A graph illustrating how much producers are willing to sell at various prices.
  • Price Axis
    The vertical axis on a market graph, indicating different price levels.
  • Quantity Axis
    The horizontal axis on a market graph, displaying the number of units bought or sold.
  • Market Price
    The current price at which goods are traded, which may differ from equilibrium and cause surplus or shortage.
  • High Price
    A price set above equilibrium, leading to reduced demand and increased supply.
  • Graph
    A visual tool used to illustrate relationships between price and quantity, including surplus areas.
  • Intersection
    The point where demand and supply curves meet, indicating equilibrium conditions.
  • Area of Surplus
    The region on a graph between the quantity supplied and quantity demanded at a price above equilibrium.