How does the consumer's surplus affect the producer?
In market conditions, are the producer and the consumer under the same conditions? In these circumstances, if the duty of the consumer arbitrator goes beyond making the conditions equal, which party will be most affected by this situation?
In a production, the ability to manage the damage also ensures that the parties are compensated for the damage. Of course, what if there's an account involved?
The market concerns both the producer and the consumer. It is the job of economic power to balance the satisfaction of the two. How is economic power made a stakeholder?
The consumer's excess supply affects the producer by reducing their sales and profits. The producer must either lower their price to encourage buyers, reduce production, or find new markets to sell their product. This can be difficult for the producer because it requires adjusting to the changing supply and demand of the market.
Dear Prof. Dr. Peter Donkor
Thank you for your enlightening information. In linear structures, the region of excess supply is above the equilibrium point. In this region, there is both supply and demand. Is pushing the manufacturer into this predicament a logical improvement or a physical impetus? How does this affect competition? In short, given the equilibrium point, are values close to y-supply, given the x-quantity constant, to be to the benefit of the producer? Or should values close to y-demand be taken into account?
Best regards
Dear doctor
I chose the following from the web hoping of concern to the discussion
"Based on the demand and supply curve, the market forces drive the price to its equilibrium level.
There are two possibilities: 1) Excess Demand or 2) Excess Supply
Excess supply is the situation where the price is above its equilibrium price. The quantity willing supplied by the producers is higher than the quantity demanded by the consumers.
Excess demand is the situation where the price is below its equilibrium price. The quantity supplied is lower than the quantity demanded by the consumers.
When we have higher prices and excess supply, manufacturers will have excess inventories and the competition among manufacturers will put the downward pressure on price as there will be some suppliers who will be willing to supply at lower prices. As prices fall, the consumer demand will increase until it finally settles at the equilibrium price.
When we have lower prices and excess demand, there will shortage of goods, putting an upward pressure on the price as there will be more buyers chasing the available goods. As price increases the suppliers will start producing more but the demand from buyers will decrease. This will drive the price and quantity to its equilibrium level."
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