Overproduction
Definition
Overproduction refers to the condition where supply (how much of a product is produced) exceeds demand (how much of it is wanted by buyers).
Analogy
Imagine you're hosting a party and you bake 100 cookies, but only 10 guests show up. You've overproduced cookies - there are more than what's needed.
Related terms
Supply and Demand: The economic principle that price is determined by the interaction of supply (availability of goods) and demand (desire for goods).
Economic Bubble: A situation where prices for assets exceed their intrinsic value due to excessive demand or optimism.
Surplus: An amount of something left over when requirements have been met; an excess of production or supply.
"Overproduction" appears in:
Subjects (1)
Study guides (1)
Resources
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.