what is a surplus and what causes it in business
One common cause of surplus is that the cost of a product is initially set too high, and nobody is willing to pay that price. This isn't good for business, as many companies have no choice but to sell the product at a lower cost than they were initially willing, in order to get rid of the stock.
What is a 'Surplus'. A surplus is the amount of an asset or resource that exceeds the portion that is utilized. A surplus is used to describe many excess assets including income, profits, capital and goods.