Offramboð

Offramboð, also known as oversupply, is a market condition in which the quantity of a good or service supplied at the prevailing price exceeds the quantity demanded. It occurs when sellers are willing to sell more than buyers are willing to purchase, creating a surplus of goods. In a standard supply-and-demand model, the excess supply puts downward pressure on prices and may lead to increased inventories.

Causes of offramboð include price floors set above the equilibrium price, which prevent prices from clearing the market; rapid or unexpected increases in production; declines in demand due to economic downturns, changes in tastes, or the availability of better substitutes; seasonal production patterns; or improvements in supply efficiency that outpace demand growth.

Effects can include falling prices and reduced revenue for producers, incentives to cut production or discounts to move stock, higher inventory costs, potential wastage in cases of perishable goods, and changes in employment within affected sectors. Offramboð can also prompt buyers to wait for further price drops or for new contract terms.

Measurement and indicators rely on the difference between quantity supplied and quantity demanded at a given price. Surpluses appear as rising inventories, price declines, or statistical stockpile data. A persistent offramboð may signal a structural mismatch between supply capacity and demand, requiring policy or market adjustments.

Policy responses range from allowing prices to fall toward equilibrium and reducing production, to governments purchasing, storing, or exporting the excess supply. Markets may also reallocate resources through contracts, subsidies, or investment shifts. Examples include bumper crop years in agriculture or oversupply in energy markets.