Question

How does over-supply affect prices and consumer perceptions of a product?

Answer 1

to much of something can cause it to be worthless because then everyone has what they need of it

Answer 2

Answer and Explanation

Over-supply is when the quantity of goods in the market is very high and beyond what is required by the consumers or the customers. Since the market always settles at the point where supply equals demand.Over supply will ultimately lead to the reduction of the prices. This will result in a reduction in profits and an increase in inventory of unsold goods. This will lead to losses because the supply has risen thus the market has flooded with same commodities leading to low prices. In every market the stock is determined by the demand and supply.