shortage

Examples of shortage in the following topics:

• Arguments for and Against Government Price Controls

  • This in turn limits the possibility of shortages, which benefits consumer.
  • Finally, when shortages occur, price controls can prevent producers from gouging their customers on price.
  • As Nobel Prize winner Milton Friedman said, "We economists do not know much, but we do know how to create a shortage.
  • Instantly you'll have a tomato shortage. "
  • Price floors often lead to surpluses, which can be just as detrimental as a shortage.

• Impacts of Surpluses and Shortages on Market Equilibrium

  • The existence of surpluses or shortages in supply will result in disequilibrium, or a lack of balance between supply and demand levels.
  • Surpluses and shortages often result in market inefficiencies due to a shifting market equilibrium.
  • Inversely, shortage is a term used to indicate that the supply produced is below that of the quantity being demanded by the consumers.
  • Indeed, Garrett Hardin emphasized that a shortage of supply could also be perceived as a 'longage' of demand, as the two are inversely related.
  • From this vantage point shortages can be attributed to population growth as much as resource scarcity.

• Price Ceiling Impact on Market Outcome

  • This is because a price ceiling above the equilibrium price will lead to the product being sold at the equilibrium price.If the ceiling is less than the economic price, the immediate result will be a supply shortage.
  • The quantity demanded will increase because more people will be willing to pay the lower price to get the good while producers will be willing to supply less, leading to a shortage.
  • This is generally considered a fair way to minimize the impact of a shortage caused by a ceiling, but is generally reserved for times of war or severe economic distress.
  • Prolonged shortages caused by price ceilings can create black markets for that good.
  • If a price ceiling is set below the free-market equilibrium price (as shown where the supply and demand curves intersect), the result will be a shortage of the good in the market.

• Macroeconomic Equilibrium

  • If quantity demand increases and supply remains unchanged, a shortage occurs, leading to a higher price until the quantity demanded is pushed back to equilibrium.
  • If quantity demand remains unchanged and supply decreases, a shortage occurs, leading to a higher price until the quantity supplied is pushed back to equilibrium.

• Impacts of Price Changes on Consumer Surplus

  • This means the market will have a shortage for that good.
  • This shortage will create a deadweight loss, or a market wide loss of efficiency and value that neither producer nor consumers obtain.

• Differences Between Centrally Planned and Market Economies

  • For instance, in 2000 there was a shortage of tetanus vaccine in the United States.
  • In a planned economy, this shortage would not happen because the government would boost production of the vaccine if it were needed.

• Reasons for and Consequences of Shift in Aggregate Demand

  • It gives the amounts of goods and services that will be demanded at all possible price levels, which, unless there are shortages, is equivalent to GDP.

• Efficiency Wage Theory

  • The market-clearing wage is the wage at which supply equals demand; there is no excess supply of labor (unemployment) and no excess demand for labor (labor shortage).

• The Law of Supply

  • It is the point where there is no surplus or shortage in the market .

• Price Floor Impact on Market Outcome

  • The government could then sell the surplus off at a loss in times of a food shortage.