The figure given below shows the demand and supply curves in the market for coffee. S 1 and D 1 are the original demand and supply curves.Figure 3.5

-When will a shortage occur in a market?
A)When the actual price is lower than the equilibrium price
B)When quantity supplied is greater than the equilibrium quantity
C)When the quantity that consumers are willing and able to purchase decreases
D)When the quantity available at zero price is insufficient to meet demand
E)When a price floor is set in the market

Question

The figure given below shows the demand and supply curves in the market for coffee. S 1 and D 1 are the original demand and supply curves.Figure 3.5
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-When will a shortage occur in a market?
A)When the actual price is lower than the equilibrium price 
B)When quantity supplied is greater than the equilibrium quantity 
C)When the quantity that consumers are willing and able to purchase decreases 
D)When the quantity available at zero price is insufficient to meet demand 
E)When a price floor is set in the market

Quizplus · Accepted Answer

A shortage will occur in a market when the actual price is lower than the equilibrium price. At this price, the quantity demanded by consumers will exceed the quantity supplied by producers, leading to a shortage of the product in the market. In the given diagram, the equilibrium price is P1 and the equilibrium quantity is Q1. If the actual price is lower than P1, there will be a shortage in the market.

The Figure Given Below Shows the Demand and Supply Curves