Shortage Answers
Definition: Shortage is the insufficiency of a good when the quantity supplied is less than the quantity demand; shortages occur when the price is below the equilibrium price.
Example: Hyped movies like the “Dark Knight” tend to be “sold out” on the first night and so there is a shortage of seats available to see the movie.
1. True. The consumer can only buy as many as the supplier provides. Consumers cannot change the magnitude of the shortage.
2. 0.4 Million apartments.
3. A price ceiling below the equilibrium point (rent control).
Definition: Shortage is the insufficiency of a good when the quantity supplied is less than the quantity demand; shortages occur when the price is below the equilibrium price.
Example: Hyped movies like the “Dark Knight” tend to be “sold out” on the first night and so there is a shortage of seats available to see the movie.
1. True. The consumer can only buy as many as the supplier provides. Consumers cannot change the magnitude of the shortage.
2. 0.4 Million apartments.
3. A price ceiling below the equilibrium point (rent control).