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Case Studies Index

What is Supply?... Continued

c) Forces of Supply and Demand (Shortage)

When the supply curve and demand curve are again overlapped on each other, they again reveal either a disequilibrium or equilibrium. However, in this case in fig. 7 on the left reveals a shortage disequilibrium. For example;

At P = 10,
Quantity demanded = 70 while
Quantity supplied = 10

A shortage of 60 results (or 10-70)

With a shortage, consumers outbid each other pushing prices up towards equilibrium.

 

 

outcomes
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