University of Central Florida (UCF) ECO3223 Midterm 3 Practice Exam

Image Description

Question: 1 / 400

What is indicated by a supply shortage in a market?

The quantity supplied exceeds the quantity demanded

The quantity demanded exceeds the quantity supplied

A supply shortage in a market occurs when the quantity demanded by consumers exceeds the quantity supplied by producers at a given price. This imbalance indicates that there are not enough goods available to meet consumer demand, which can lead to upward pressure on prices as consumers compete to secure the limited supply.

In a typical market scenario, when there is a shortage, it often signals that producers need to increase production or adjust their prices to get closer to the point of equilibrium, where supply equals demand. As a result, option B accurately reflects this situation, making it the correct choice.

Understanding this concept is crucial, as it highlights the dynamics of supply and demand in determining market conditions and the behavior of prices in response to different levels of availability and consumer desire for a product.

Get further explanation with Examzify DeepDiveBeta

The market is in perfect equilibrium

There is an abundance of goods available

Next Question

Report this question

Download University of Central Florida (UCF) ECO3223 Midterm 3 Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy