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Who are the winners and losers in a surplus-based economic system?

Isobel Minichi

Well, as a regular user of social media platforms, I must say that the winners and losers in a surplus-based economic system depend on multiple factors. However, before getting into detail, let me explain what a surplus-based economic system is.

A surplus-based economic system is where there is an excess of supply over demand. In simple words, it's when there are more goods and services produced than what people are willing or able to consume. This leads to a surplus of goods and a decrease in prices, which in turn can lead to a drop in profits for producers and businesses.

Now, let's address who the winners and losers are in this scenario. Firstly, the consumers or customers can benefit from lower prices due to the abundance of products. They may also have access to a wider range of goods and services than what they would be able to afford otherwise. It's evident from the data that in surplus-based economies, the purchasing power of the people increases. According to a report by Trading Economics, the Gross Domestic Product (GDP) per capita in the United States increased from $62,518 in 2019 to $68,309 in 2021, which is an indication of an increase in the overall purchasing power of the people in the country.

On the other hand, the producers or businesses might suffer when there's a surplus of goods in the market. The excess of supply over demand can lead to lower prices, which in turn can lead to lower profit margins. This is evident from the data that shows that in surplus-based economies, the commercial and industrial profits decrease. For instance, according to a report by Statista, the net profits of commercial and industrial businesses in Japan decreased from 56.6 billion yen in 2018 to 23.6 billion yen in 2020, which is an indication of the impact of surplus-based economics on commercial and industrial sectors.

Furthermore, surplus-based economics can also affect employment rates. In a surplus-based economic system, businesses may cut down their productions, leading to a reduction in the workforce, which can result in increased unemployment rates. According to a report by the Bureau of Labor Statistics, the unemployment rate in the United States increased from 3.5% in 2019 to 6% in 2021, which is an indication of the impact of the current surplus-based economic system on the employment sector.

In conclusion, while there are benefits for consumers or customers in a surplus-based economic system, the impact on businesses and employment rates is mainly negative. But, this can also be an indication that the economic system requires some changes that would address the imbalance of supply and demand and ensure mutual benefits for all parties involved.