Find the best solutions to your problems with the help of IDNLearn.com's experts. Whether it's a simple query or a complex problem, our community has the answers you need.
Sagot :
Answer:
The best way to solve a situation of oversupply or surplus of a particular good is to let the market correct itself until the supply matches demand, the market is in equilibrium again, and the surplus disappears.
Explanation:
The market mechanism would work like this: producers with oversupply would lower the price of their good in order to get rid of the glut, these lower prices would then increase demand, flocking more customers to the good. After some time, supply and demand would reach equilibrium again.
Obviously there could be cases in which producers would have to dispose of some unsold surplus before reaching equilibrium, in such a case we would have a market failure, and the government could step in by buying some of this excess production, and selling it at very low prices, or even giving it away for free.
We appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. Discover the answers you need at IDNLearn.com. Thank you for visiting, and we hope to see you again for more solutions.