If there is a shortage of a good, we would expect that as a result

Question

Quizplus · Accepted Answer

When there is a shortage of a good, the demand exceeds the supply. This leads to an increase in the price of the product as producers try to capitalize on the high demand. The higher price signals to producers that they should allocate more resources towards the production of the good in order to take advantage of the profits. As production increases, the shortage will be eliminated as the supply curve shifts to the right to meet the demand.

If There Is a Shortage of a Good, We Would