BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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surplus
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shortage
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equilibruim
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competition
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Detailed explanation-1: -Answer. Explanation: Shortage is there when demands get higher than suply.
Detailed explanation-2: -It’s a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise.
Detailed explanation-3: -Economists call this an “excess demand” – the quantity demanded is greater than the quantity supplied at the given price. This is also called a shortage.
Detailed explanation-4: -If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price. If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price.
Detailed explanation-5: -In economics, there are three main reasons or causes of shortages-an increase in demand, a decrease in supply, or government intervention (price ceilings for example).