GENERAL KNOWLEDGE

Detailed explanation-1: -Answer. Explanation: Shortage is there when demands get higher than suply.

Detailed explanation-2: -A shortage occurs when demand exceeds supply – in other words, when the price is too low. However, shortages tend to drive up the price, because consumers compete to purchase the product.

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: -Supply and Demand Outcomes 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).