Shortages of a particular good can be expected to lead to rising prices and increased production for that good in a market economy

Question

Quizplus · Accepted Answer

This is because as the demand for the good increases and the supply decreases, the price for the good will increase, incentivizing producers to increase their production of the good to take advantage of the higher prices and profits. This increased production will eventually help alleviate the shortage and bring prices back down towards equilibrium.

Shortages of a Particular Good Can Be Expected to Lead