5 ms·
"A shortage, in economic terms, is a condition where the quantity demanded is greater than the quantity supplied at the market price." https://www.investopedia.
by dsm4ck 5y ago
"A shortage, in economic terms, is a condition where the quantity demanded is greater than the quantity supplied at the market price." https://www.investopedia.com/terms/s/shortage.asp https://www.investopedia.com/terms/s/shortage.asp sounds like it fits the situation to me.
- tshaddox 5y agoIndeed, investopedia's definition seems to include any time supply is insufficient with no regard for the reason that the market price is not increasing.
- mdavis6890 5y agoThis is because the reason is irrelevant to whether there is a shortage or not. A shortage is when at the given price a higher quantity will be demanded than will be supplied. The normal market solution to a shortage is to raise prices until there is no longer an excess of supply at that higher price
- dragonwriter 5y agoInvestopedia’s definition treats the condition where price has not yet aligned to a new equilibrium as equivalent to one where there is a constraint preventing price adjusting to equilibrium. Leaving aside the fairly arbitrary question of whether it is correct to call both conditions “shortages”, it is important to note that they are fundamentally different situations, especially from the perspective of “is a policy change needed to address it and what policy change would that be.”
- selectodude 5y agoIf my arm hurts, it doesn’t matter if I strained something or it’s bone cancer. To me, they present the same. In economics, outcomes are all that matter.