Question

The amount by which the quantity supplied at a given price exceeds the quantity demanded (not to be confused with producer or consumer surplus).

a. Commodity surplus
b. Commodity shortage
c. Producer surplus
d. Producer shortage

Answer 1

A shortage is the amount by which the quantity supplied at a given price exceeds the quantity demanded.

Step-by-step explanation:

The amount by which the quantity supplied at a given price exceeds the quantity demanded is called a shortage.

In a shortage, the quantity demanded exceeds the quantity supplied, resulting in a situation where consumers are willing to buy more of a product than producers are willing to supply at a given price. This can lead to higher prices and potential market inefficiencies.

For example, if the price of a popular video game console drops significantly, the quantity demanded may exceed the quantity supplied, creating a shortage where consumers are willing to buy more consoles than the producers can supply.