PRESENTATION OUTLINE
Definition-
A shortage occurs whenever quantity demanded is greater than quantity supply at the market price.
Example-
If you go to the store to buy a specific item, and the item is not at the store for sell, you ask the store manager why that item is not in the store for sale and the manager tells you that the store cannot get the item right now because the manufactors of the item, says their is a shortage of the item - and they do not have the item in stock to send to the store (because of the shortage).
Example-
If the government provides free doctor visits as part of a national health care plan, consumers may experience a shortage of doctor services because when people no longer have to pay directly for them, they will be likely to increase their demand for those services.
Causes-
There are three main reasons why a shortage can occur:
1. Increase in demand (outward shift in demand curve)
2. Decrease in supply (inward shift in supply curve)
3. Government intervention
What are the differences between shortage and scarcity?
Shortage is a market condition of a particular good at a particular price. Scarcity is a naturally occurring limitation on the resource that cannot be replenished.
How to prevent shortage?
-stop wasting food
- donate cans or boxes of food to the homeless.
When there is a shortage of product-
Prices increase because the demand is higher for the product.
