If the price is set too high (above the market clearing price), then supply will exceed demand, as shown in . This results in a surplus, known as excess supply.
In order for firms to get rid of their excess supply (shown by the distance between Qs and Qd at each price level above the equilibrium price), they will need to reduce price (from P1 to Pe). This is a key reason why leftover stocks of Christmas cards are reduced in price after 25 December and why unsold summer clothes go on sale during the autumn.

Surplus is created when supply exceeds demand because the price is higher than the market equilibrium

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