> How do you get to the conclusion that producers will want to reduce their output?
An output that just sits as additional inventory doesn't actually produce any revenues, at some point it becomes economically rational to reduce said output to levels that make sense again (i.e. that don't sit in deposits collecting dust instead of being in customers' hands half a world away).
An output that just sits as additional inventory doesn't actually produce any revenues, at some point it becomes economically rational to reduce said output to levels that make sense again (i.e. that don't sit in deposits collecting dust instead of being in customers' hands half a world away).