In supply-and-demand analysis, a surplus means excess supply at a price. If sellers would offer 900 chairs per week at $70 while buyers would purchase 700, the model surplus is 200 chairs per week.
A shortage has the reverse quantity gap: demand exceeds supply at the checked price. OpenStax Section 3.1 places both imbalances around the market-clearing point.
That usage differs from accounting profit, free cash flow, a budget surplus, consumer surplus, producer surplus, and total surplus. It also differs from ending inventory: offered but unsold quantity may affect inventory, but the opening stock, production, spoilage, commitments, and period boundary still need reconciliation.
Adjustment depends on institutions
In a flexible competitive model, excess supply can put downward pressure on price. Sellers may also cut production, accumulate inventory, improve terms, change quality, search for buyers, exit, or seek a rule that supports price. A binding price floor can preserve the imbalance.
The computed gap does not prove waste or loss, identify who bears carrying cost, or measure welfare. Those claims require transaction, inventory, cost, distribution, and institutional evidence beyond the two curves.
Market claims require different comparisons and records
Detailed visual description
The table requires a defined product, parties, geography, period, institutions, and transaction stage for market boundaries. Quantity movements compare own-price points on one fixed relationship, while shifts compare quantities at a common price after a named nonprice change. Equilibrium requires quantity demanded to equal quantity supplied and does not establish fairness or observed trade. Shortage and surplus retain quantity units and are not scarcity, inventory, profit, or welfare measures. Accounting claims return to entity, contract, event, recognition, measurement, and source records.
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- Compute excess supply at a stated price and distinguish the market imbalance from inventory, accounting profit, cash surplus, consumer or producer surplus, and total welfare surplus.
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- Market equilibrium — Analyze
To analyze this concept: Required. A surplus is interpreted relative to common demand and supply schedules and their clearing point.
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- Price floor — Analyze
Required level here: analyze. Required. A binding floor can create price-specific excess supply under the stated curves.