Shortage
A shortage occurs when quantity demanded exceeds quantity supplied at a given price. This indicates the price is below the equilibrium level and will tend to rise. Shortages create queuing, rationing, or price increases.
Real World
During the 2021 global semiconductor shortage, PlayStation 5 consoles retailed at £449 but demand far exceeded supply, pushing resale prices above £700 on eBay and creating months-long waiting lists.
Exam Focus
Show the shortage as the horizontal gap between Qd and Qs below the equilibrium price on your diagram.
How well did you know this?