ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -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.

Detailed explanation-3: -A shortage is a lack of something, especially a severe lack. A drought is a shortage of water. When there’s a shortage, there’s not enough of something. If you don’t have enough money to pay your bills, you have a shortage of money.

Detailed explanation-4: -The bottom line is that scarcity is a naturally occurring limitation on the resources, and such resources cannot be replenished. On the other hand, a shortage is an artificial limitation brought about by the market situation. It can be witnessed in particular goods or services, resulting in a given price.