False Shortage
In microeconomics, supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an economic equilibrium for price and quantity.
The four basic laws of supply and demand are:
- If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price.
- If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price.
- If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.
- If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher equilibrium price.
Read more about False Shortage: Graphical Representation of Supply and Demand, Other Markets, Empirical Estimation, Macroeconomic Uses of Demand and Supply, History, Criticisms
Famous quotes containing the words false and/or shortage:
“... so far from entrenching human conduct within the gentle barriers of peace and love, religion has ever been, and now is, the deepest source of contentions, wars, persecutions for conscience sake, angry words, angry feelings, backbitings, slanders, suspicions, false judgments, evil interpretations, unwise, unjust, injurious, inconsistent actions.”
—Frances Wright (1795–1852)
“As long as green hills are there, never fear a shortage of firewood.”
—Chinese proverb.