[This is part of the series: The Complete Guide To Economics 101.]
What is an economic shortage?
An Economic Shortage is an imbalance of supply and demand where quantity demanded is greater than quantity supplied.
This imbalance creates a shortage of available goods and services.
It is important to remember, shortages are always caused by price ceilings.
An example of a shortage might be a crowded beach where there is nowhere to sit. There is a shortage of “beach” for people to enjoy. In the case of a public beach, it is generally because there is no price involved.
Graphically, a price ceiling looks like this: