ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A shortage occurs when producers will not or cannot offer goods or services at the current prices. Scarcity always exists.

Detailed explanation-2: -A shortage is a situation in which demand for a product or service exceeds the available supply. When this occurs, the market is said to be in a state of disequilibrium. Usually, this condition is temporary as the product will be replenished and the market regains equilibrium.

Detailed explanation-3: -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-4: -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-5: –Decrease in supply-occurs when the supply of a good drops. For example, a virus among pigs means many of them must be euthanized, creating a shortage of pork products.