A shortage will occur when ________.

Question

Quizplus · Accepted Answer

A shortage occurs when the quantity demanded of a good or service exceeds the quantity supplied at the current price, which means that the price is below the equilibrium point. When the market is in equilibrium, the quantity demanded and supplied are equal, and there is no shortage or surplus. Choices A and D are incorrect because they suggest an increase in production or a decrease in demand, which would not result in a shortage. Choice B is also incorrect because falling prices would likely lead to an increase in demand, ceteris paribus, and potentially a surplus rather than a shortage.

A Shortage Will Occur When ________