In what cases does an excess supply occur on the market, and in what cases is there a deficit demand? Give relevant examples.
a) The seller bought new equipment, as a result, he was able to produce his product, saving more resources, so he lowered the price of his product, and the demand for his product increased, buyers moved from other sellers with a higher price to him, so his revenue increased …
b) The company – the supplier of resources (building materials) for the construction company was closed for debts and the construction company had to conclude an agreement with another supplier and then purchase building materials at a higher price, therefore the price for the services of this company increased and the demand for its services fell, consumers left them to other construction companies, with cheaper prices. The seller’s income has dropped.
c) Two competing firms, for example Coca-Cola and Pepsi-Cola, created 2 new promotions at the same time, or simultaneously launched a similar new product (like Fanta and Mirinda) and it is not known what will happen on the market, people may prefer one of the firms to a greater extent, and this firm’s income will increase.