A market condition where demand exceeds supply is referred to as what?

In economics, when demand exceeds supply, the market experiences a situation known as a shortage. A shortage occurs when consumers want to purchase more of a good or service than is available at the current price. This imbalance leads to upward pressure on prices as consumers compete for the limited supply, ultimately motivating producers to increase production or new competitors to enter the market.

The concept of equilibrium refers to the point where the quantity demanded equals the quantity supplied, indicating a balance between consumers' willingness to buy and producers' willingness to sell. A surplus, on the other hand, occurs when supply exceeds demand, leading to excess goods in the market and typically resulting in downward pressure on prices. Lastly, the term "equilibrium quantity" describes the amount of goods or services that are exchanged at the equilibrium price, not a condition of imbalance like a shortage. Therefore, the correct identification of a market condition where demand exceeds supply is a shortage.