A shortage, in economic terms, is a condition where the quantity demanded is greater than the quantity supplied at the market price . There are three main causes of shortage-increase in demand,...What is surplus and shortage in economics?
In economics, a shortage or excess demand is a situation in which the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply (surplus).What is shortage in micro economics?
Definitions. In a perfect market (one that matches a simple microeconomic model), an excess of demand will prompt sellers to increase prices until demand at that price matches the available supply, establishing market equilibrium. In economic terminology, a shortage occurs when for some reason (such as government intervention, or decisions by sellers not to raise prices) the price does not rise to reach equilibrium.What is an example of a shortage?
A good example for a shortage is when oil companies suddenly increase the prices of gas products. Consumers will be forced to trim down their gas consumption to avoid the increasing prices.