Shortage
A shortage occurs when quantity demanded exceeds quantity supplied at a particular price and time. It can create queues, rationing or pressure for prices and output to adjust. Its cause may be a price below the model’s equilibrium, a disruption or a restriction on supply. A shortage at one price does not mean there can be no supply at any price.
Worked example
At a controlled price of $5 buyers want 1,000 units but sellers offer 700. The quantity shortage is 300 units at that price, assuming those demand and supply estimates apply.
Common mistake
Do not call any low stock level a market shortage without comparing demand and supply at the stated price. Scarcity is a broader concept.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |