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What does it mean when a price is too high to clear the market?
A market-clearing price is the price of a good or service at which quantity supplied is equal to quantity demanded, also called the equilibrium price. If the sale price is higher than the market-clearing price, then supply will exceed demand, and a surplus inventory will build up over the long run.
What is it called when prices are too high?
Economists call this situation an “excess supply” – that is the quantity demanded is less than the quantity supplied at the given price. This is also called a surplus. So, if the price is too high, sellers will have leftover chickens. No leftover chickens and no unhappy consumers.
What is meant by market-clearing price?
The market clearing price is the price at which the demand for a good by consumers is equal to the number of goods that can be produced at that price. At this price, the supply and demand are exactly equal: there are no unused goods waiting to be sold, and no buyers who are unable to buy.
What is equilibrium worth?
EQM Price Statistics
| Equilibrium Price | $0.0006951 |
|---|---|
| Price Change24h | No Data |
| 24h Low / 24h High | No Data |
| Trading Volume24h | $1.27 |
| Volume / Market Cap | No Data |
What is the effect of oversupply?
Overproduction, or oversupply, means you have too much of something than is necessary to meet the demand of your market. The resulting glut leads to lower prices and possibly unsold goods. That, in turn, leads to the cost of manufacturing – including the cost of labor – increasing drastically.
What happens when oversupply?
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.
What is a clear market?
Clear Market Provision (Banking & Finance Glossary) A provision in a Commitment Letter whereby the Borrower agrees not to issue any new debt, equity or other securities during the Syndication process that would compete with the syndication of the loans.