Whenever there is a surplus, the price will drop until the surplus goes away. When the surplus is eliminated, the quantity supplied just equals the quantity demanded—that is, the amount that producers want to sell exactly equals the amount that consumers want to buy.

Does surplus increase price?

A Market Surplus occurs when there is excess supply- that is quantity supplied is greater than quantity demanded. ... In response to the demand of the consumers, producers will raise both the price of their product and the quantity they are willing to supply.

Does surplus lead to lower prices?

When supply exceeds demand for a particular product or service, prices tend to drop, assuming no government or similar entities act to prop them up artificially.