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By that logic, the only time you could say "shortage" is when there's zero of a thing left anywhere. That's a non-standard interpretation of the word.
by neonate 8y ago
By that logic, the only time you could say "shortage" is when there's zero of a thing left anywhere. That's a non-standard interpretation of the word.
- dragonwriter 8y ago> By that logic, the only time you could say "shortage" is when there's zero of a thing left anywhere. Well, sure, shortage requires that the quantity demanded exceeds quantity supplied at all possible prices, which implies (barring some external constraint preventing trades) that the maximum quantity producible should be produced and sold, with no idle capacity. Genuine shortages are unusual. > That's a non-standard interpretation of the word. It's the standard use is market economics. It's true that that in non-technical use, a common (and perhaps the most common) use of “shortage” is “higher market clearing price than I would prefer”. It's just important to be clear what sense of “shortage” one is referring to. Because very often the latter sense is in play, but given the significance of the former.
- nradov 8y agoShortages generally only occur when some external force (like the government) fixes prices below the market clearing price. So for example there is a shortage of doctors who will take new Medicaid patients in many areas because that program doesn't pay doctors very much. (I'm not trying to start a debate on healthcare policy here, just giving an example of how shortages can exist even when there is supply.)
- username90 8y ago> Shortages generally only occur when some external force (like the government) fixes prices below the market clearing price. Or when some external force artificially constraints the supply by limiting trade (or immigration for workers).