Overproduction
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In economics, overproduction, oversupply, excess of supply or glut refers to excess of supply over demand of products being offered to the market. This leads to lower prices and/or unsold goods along with the possibility of unemployment.
The demand side equivalent is underconsumption; some consider supply and demand two sides to the same coin – excess supply is only relative to a given demand, and insufficient demand is only relative to a given supply – and thus consider overproduction and underconsumption equivalent.
Overproduction is often attributed as due to previous overinvestment – creation of excess productive capacity, which must then either lie idle (or under capacity), which is unprofitable, or produce an excess supply.
See also
- Demand shortfall, microeconomic form, focused on demand side
- Underconsumption, macroeconomic demand side
- Common Agricultural Policy of the EEC
- Resource exploitation
- Overdrafting
- Overfishing
- Overgrazing
- Price stability
