ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Shortages are not constant. In economics, a shortage is a term that is used to refer to the state at which the amount of products demanded in the market is greater than the amount supplied.

Detailed explanation-2: -A shortage 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, decrease in supply, and government intervention. Shortage, as it is used in economics, should not be confused with “scarcity."

Detailed explanation-3: -Lesson Summary Scarcity and shortage are two fundamental concepts. Scarcity refers to the existence of limited resources that are not enough to address unlimited human needs or demands. On the other hand, shortage refers to an occurrence whereby the order in the market outdoes the supply available at a given time.

Detailed explanation-4: -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).

Detailed explanation-5: -Examples of shortages include food, water, power, and labor. Demand or supply changes can occur for various reasons; not all are related to a price change. Scarcity and shortage are two different, and certain economic shortage characteristics make them stand apart.