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:
“Well, most men have bound their eyes with one or another handkerchief, and attached themselves to some of these communities of opinion. This conformity makes them not false in a few particulars, authors of a few lies, but false in all particulars. Their every truth is not quite true. Their two is not the real two, their four not the real four; so that every word they say chagrins us and we know not where to set them right.”
—Ralph Waldo Emerson (1803–1882)
“As long as green hills are there, never fear a shortage of firewood.”
—Chinese proverb.