A market shortage is
A) The amount by which the quantity demanded exceeds the quantity supplied at a given price.
B) The result of a price floor.
C) A situation in which producers cannot sell all the goods and services that they are willing and otherwise able to sell.
D) The amount by which the cost of production exceeds the price of a good. A market shortage is the excess of quantity demanded over quantity supplied.

Question

Quizplus · Accepted Answer

A market shortage occurs when the quantity demanded of a good or service exceeds the quantity supplied at the current market price. This leads to an increase in the price as suppliers are able to charge more due to the scarcity of the item. Choice B is incorrect because a price floor would actually create a surplus, not a shortage. Choice C describes a situation where producers are not able to sell all of their goods, which is a surplus, not a shortage. Choice D describes a situation where the cost of production may be high, but it does not necessarily lead to a market shortage.

A Market Shortage Is