surplus

Surplus is an amount that remains when requirements or expectations are satisfied, or when supply exceeds demand. It can refer to goods, money, or resources in private and public contexts. In economics, surplus often appears as consumer surplus, producer surplus, or a broader measure of total welfare.

Consumer surplus is the difference between the maximum price a consumer is willing to pay and the price actually paid. Producer surplus is the difference between the price received and the marginal cost of production. The sum of consumer and producer surplus represents the total economic surplus, a proxy for welfare under a given market price.

A budget surplus occurs when government revenue, such as taxes, exceeds expenditures over a period, allowing additions to reserves or debt reduction. A trade surplus occurs when a country’s exports exceed its imports, contributing positively to the current account.

Surpluses can be temporary or persistent and are influenced by price signals, economic conditions, and policy. They may prompt price adjustments, inventory management, or policy responses such as taxation, subsidies, or changes in spending.

Practical management of surplus includes storage or redistribution of goods, sale into other markets, or disposal in the case of perishables. In organizations, surplus can indicate excess of assets or funds beyond planned needs and may be reallocated or saved as reserves.

In accounting and finance, surplus is sometimes used to describe positive equity or net income in not-for-profit entities, where it denotes resources available beyond operating requirements.