Which term describes the situation of excess supply in the market?

The term that describes the situation of excess supply in the market is "surplus." When the quantity of a good or service supplied exceeds the quantity demanded at a certain price level, a surplus occurs. This imbalance typically leads to downward pressure on prices, as sellers may reduce prices to clear excess inventory and stimulate demand.

In contrast, concepts like price ceilings and price floors relate to government-imposed limits on prices and do not directly describe the condition of excess supply. Market equilibrium occurs when the quantity supplied equals the quantity demanded, which is the opposite of a surplus. Hence, "surplus" accurately characterizes this specific market condition.