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November 27, 2022 

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BY-PRODUCT: One of two goods that are produced jointly using the same resource--that is, the production of one good automatically triggers the production of the other. Also termed joint products or complements-in-production, the phrase by-product is often used when one of the products is unwanted or of secondary importance. For example, sawdust is generally considered a by-product from producing lumber from trees.

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BUYERS' MARKET:

A disequilibrium condition in a competitive market that has a surplus or excess supply. Because the quantity supplied is greater than the quantity demanded, buyers have the "upper hand" when negotiating. A market surplus also goes by the more common term of buyers' market. The alternative to a buyers' market is a sellers' market, which has a shortage or excess demand.
A buyers' market exists because the quantity supplied by the sellers exceeds the quantity demanded by the buyers... at a given market price. In this situation, sellers are seeking to sell more of the good than buyers are willing to buy, hence buyers can pick and choose the goods purchased from the sellers. Sellers are lucky to find someone willing and able to purchase their good.

Buyers' Market
A buyers' market is illustrated by the market for 8-track tapes displayed in this exhibit. This graph was generated with data from the 88th Annual Trackmania 8-Track Tape Collectors Convention at the Shady Valley Exposition Center.

At the existing market price of 70 cents, buyers have the "upper hand" in this market due to the excess supply of 8-track tapes. This surplus is indicated as the difference between the quantity supplied and the quantity demanded at the designated market price. In particular, the 70-cent price generates a quantity supplied of 600 tapes and a quantity demanded of 200 tapes. Sellers are willing and able to sell 400 tapes more than buyers are willing and able to buy. This excess supply of 400 tapes is what gives the buyers the upper hand.

Note that a buyers' market does not mean the lack of competition among demanders have given some buyers market control. A buyers' market is a competitive market that simply has a temporary imbalance between the quantity demanded by the buyers and the quantity supplied by the sellers. A change in the market price eliminates the buyers' market, and could possibly even create a sellers' market.

<= BUYERS' INCOME, DEMAND DETERMINANTBUYERS' PREFERENCES, DEMAND DETERMINANT =>


Recommended Citation:

BUYERS' MARKET, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2022. [Accessed: November 27, 2022].


Check Out These Related Terms...

     | sellers' market | excess supply | excess demand | shortage | market disequilibrium | disequilibrium price |


Or For A Little Background...

     | surplus | market | equilibrium | market equilibrium | equilibrium price | equilibrium quantity | competition | market clearing | voluntary exchange |


And For Further Study...

     | market equilibrium, numerical analysis | market equilibrium, graphical analysis | competitive market | self correction, market | competitive market | invisible hand | free enterprise |


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