A shortage will occur whenever
A)price is below the equilibrium price.
B)price is above the equilibrium price.
C)price is equal to the equilibrium price.
D)the supply curve is upward sloping.

Question

Quizplus · Accepted Answer

A shortage will occur when the price is below the equilibrium price because at that price, the quantity demanded exceeds the quantity supplied, and there are not enough goods for everyone who wants them. This creates a shortage or excess demand. When the price is too low, suppliers are unable or unwilling to produce enough to meet the demand.

A Shortage Will Occur Whenever