Oversupplied describes a situation where there's an excess amount of a good or service available in the market compared to the demand for it. This imbalance leads to various consequences, including decreased prices, reduced production, and potential waste. The term highlights a failure to accurately match supply with consumer needs, often due to factors such as overestimation of demand, increased production capacity, or a decline in consumption. This state of oversupply can negatively impact producers, as they struggle to sell their goods at profitable levels, ultimately leading to economic inefficiencies and market instability. It signifies a market where more of a product or service is available than consumers want or need.
Oversupplied meaning with examples
- After the unexpected surge in global oil production, the market became oversupplied, leading to a significant drop in crude oil prices. Oil-producing nations faced economic challenges as their revenues plummeted. Storage facilities filled to capacity, and some producers even considered curtailing their operations to manage the surplus and mitigate losses, reflecting the imbalance.
- The initial excitement surrounding the new smartphone model led to a surge in production, resulting in retailers being oversupplied with inventory. The demand didn't meet expectations, causing them to implement significant markdowns. The manufacturers reduced subsequent orders, which eventually caused a hit to the manufacturer’s production quotas.
- Following the construction of several new hotels in the city, the tourist accommodation market became oversupplied. Hotels struggled to fill rooms, and competition intensified. Lower occupancy rates forced hotels to lower prices and invest more in promotions to attract guests, demonstrating the impact of excess supply.
- In a booming agricultural sector, the increased production of a specific crop left farmers oversupplied, causing a decrease in the price received for their harvests. With storage issues and difficulty finding buyers, many farmers faced financial hardship, illustrating the challenges of dealing with surplus produce.