Shortages create incentives for businesses to make quantity adjustments even when prices don't change.

Question

Quizplus · Accepted Answer

Shortages mean there is excess demand for a product, which can lead businesses to adjust their production and supply levels in order to take advantage of the high demand and potentially increase profits. This adjustment in quantity is driven by the shortage, rather than changes in the price of the product.

Shortages Create Incentives for Businesses to Make Quantity Adjustments Even