Keyword Analysis & Research: economics shortage

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What is meant by a shortage in economics?

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.

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