Final answer:
A low price generally indicates to suppliers that there is too much of a product being produced, which is often due to excess supply in the market.
Step-by-step explanation:
When suppliers see a low price for their products, it typically signals that too much of a product is being produced relative to current demand. This situation can occur if demand for the product decreases (demand shifts to the left) or if the quantity supplied increases (supply shifts to the right), leading to excess supply and driving down the market price, sometimes even below the cost of production. For example, if international companies observe that their steel, computer chips, or machine tools cannot be sold at prices above their production cost, this indicates an excess supply in the market. As prices fall, it signals buyers to purchase more, but it also signifies suppliers to produce less, as the market seeks equilibrium.