When Does a Shortage Occur

question 2

Essay

When does a shortage occur?

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Definitions:

Short-Run Equilibrium

The state in economics where demand equals supply in the short term, and all prices are in balance.

Demand Determined

A situation where the quantity and price of goods or services are decided by consumer demand rather than other factors.

Labor Force

The total number of people, including both the employed and those actively seeking employment, available to work in an economy.

Investment Spending

Expenditures on new physical capital, such as buildings, machinery, and equipment, intended to increase future production.