Price pressure

If supply exceeds demand in a market segment , price pressure arises, i.e. the price of the goods becomes a decisive factor in purchasing (in contrast to markets in which the supply of goods is too scarce: there, the availability of the goods becomes the main criterion).

Accordingly, all competitors are forced to minimize the price of their goods, which initially reduces profit margins and profits , but in the long term it also leads to a market shakeout : those suppliers who can produce the goods less cheaply are pushed out of the market.