What defines a surplus in a market?

A surplus in a market is defined as a situation in which quantity supplied is greater than quantity demanded. This occurs when producers supply more of a good or service than consumers are willing to buy at a certain price level. When there is a surplus, it often leads to downward pressure on prices. Sellers may reduce their prices to increase sales and eliminate excess inventory, which eventually brings the market back toward equilibrium where quantity supplied equals quantity demanded.

In contrast, situations where quantity supplied is less than quantity demanded indicate a shortage, meaning there isn't enough of the good available to satisfy consumer demand at the current price. If quantity supplied equals quantity demanded, the market is said to be in equilibrium, with no surplus or shortage. And when demand exceeds supply, it also suggests a shortage rather than a surplus. Thus, option C correctly identifies the conditions that characterize a surplus in the market.