What describes a shortage in economic terms?

A shortage occurs in economic terms when the quantity demanded for a good or service exceeds the quantity supplied at a given price. This typically happens at prices below the market equilibrium, where the forces of supply and demand are balanced. When the demand for a product surpasses what is available, consumers cannot obtain enough of that product, leading to a scarcity in the market.

This situation prompts sellers to raise prices, attracting more suppliers to enter the market and eventually moving the market toward equilibrium, where quantity supplied matches quantity demanded. Understanding this concept is crucial as it helps explain how prices and availability of goods can fluctuate in response to changes in consumer desire relative to what is available.