Shortages in a market occur when?

Shortages in a market occur when the quantity demanded exceeds the quantity supplied. This situation arises when consumers want to purchase more of a good or service than what is available in the market at a given price.

When this imbalance occurs, it often leads to upward pressure on prices as consumers compete to secure the limited goods available. Sellers may notice that they can charge a higher price because there are more buyers than goods, incentivizing them to increase production or raise prices. This dynamic helps to signal to the market that more supply is needed to meet consumer demand, eventually moving the market back towards equilibrium where quantity demanded equals quantity supplied.

In essence, a shortage reflects a condition where the existing price does not allow for balance between what consumers want to buy and what producers are willing to sell.