When do surpluses occur?

Surpluses occur when the quantity of a good or service supplied exceeds the quantity demanded at a specific price level. This situation typically arises when prices are set above the equilibrium price, leading to excess supply in the market. Surpluses can also occur due to factors such as increased production, decreased consumer demand, or external economic conditions. To address surpluses, prices may need to be lowered to encourage consumption and restore market balance.