excess supply


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Excess Supply

Supply of a good or service well over demand. Excess supply leads to low prices for the good or service.

excess supply

see EQUILIBRIUM MARKET PRICE.
Excess supplyclick for a larger image
Fig. 65 Excess supply.

excess supply

a situation in which the quantity supplied (see SUPPLY) of a product (OQ2 in Fig. 65) exceeds the quantity demanded (see DEMAND) of the product (OQ1) at the existing market price (OP). In a competitive market there will be a downward pressure on price as suppliers compete to dispose of surpluses, but where there is government intervention the situation could persist. See EQUILIBRIUM MARKET PRICE, EXCESS DEMAND, PRICE CONTROLS, PRICE SUPPORT, COMMON AGRICULTURAL POLICY.
References in periodicals archive ?
Structural vacancy is the excess supply in the market that does not meet the needs of space users--a mismatch between the attributes of the space and the needs of the space user.
However, the number of houses for sale has also increased and as a result, excess supply continues to plague the market.
He says that COO is moving at lower prices just to get rid of excess supply.
As the 2000s rolled in and 2001 brought a recession, a decline in global tissue demand, increased competition, and excess supply.
In any business, excess supply and low demand means one thing - cut prices.
He added: "With the excess supply of unsold properties increasing, further house price falls are inevitable over the coming months.
However, Hometrack said that the excess supply of properties on the market increased again this month, with the number of buyers registered with estate agents falling by 3.
Improved Jewellery and Auto Demand Unlikely to Lift Palladium Price as Excess Supply Continues
Around 550 million liters of quality wine in France and table wine in Spain are earmarked as unwanted surplus and would be subject to "crisis distillation", the usual method for disposing of excess supply, European Commission officials said.
He also points to some "quiet failures" among outsourcing providers, which are related to quality service issues rather than excess supply.
Wilson reminds us that other cultures have used polygamy as a remedy for excess supply of women but acknowledges that this won't fly in Western cultures.