When does a shortage occur in a market?

A shortage occurs in a market specifically when the quantity demanded by consumers exceeds the quantity supplied by producers at a given price. This situation creates an imbalance where consumers are willing and able to buy more of a good or service than what is currently available, leading to unmet demand.

In such scenarios, the market often responds by increasing prices, which serves to reduce demand and encourage suppliers to produce more. Without this adjustment, the shortage continues until either an adjustment in supply or demand occurs, or the price of the good rises to restore equilibrium.

The other scenarios described do not result in a shortage. For instance, when supply exceeds demand, there is a surplus rather than a shortage. When prices are too high, it often dampens demand but does not necessarily correlate with a shortage of goods in supply. Lastly, achieving equilibrium indicates a balance where the quantity supplied equals the quantity demanded, which is the opposite of what defines a shortage. Thus, the condition where demand exceeds supply is the precise definition of a market shortage.