A shortage exists in a market if

Question

Quizplus · Accepted Answer

A shortage exists in a market when the quantity demanded of a good exceeds the quantity supplied at the current market price, which means that the equilibrium price has not yet been reached. Therefore, the current price is below its equilibrium price, which is the correct answer. Option A is incorrect as it states that there is an excess supply of the good. Option B is incorrect as it is the opposite of what a shortage is. Option D is incorrect as only option C is the correct answer.

A Shortage Exists in a Market If