What Is a Shortage?

A shortage, ꦯin economic terms, is a condition where the quantity of a product or service demanded is greater than the quantity supplied at🥂 the market price.

A shortage can be contrasted with a surplus.

How a Shortage Works

In a normally functioning market, there is aﷺn equilibrium between the quantity demanded and quantity supplied at a pric🍃e point dictated by market forces.

A shortage occurs when demand for a product or service exceeds the available supply. When this happens, the market is said to be in a state of disequilibrium. Usually, this condition is temporary as the product is replenished and the m♓arket regains equilibrium.

Note that shortage should not be confused with the economics term "scarcity." Shortages are usually temporary and can be corrected while scarcities tend to be systemic and cannot be readily resolved.

Causes of Shortage

There are three main causes of shortage:

1. Increase in demand (outward shift in the demand curve): For example, a sudden heatwave leads to an unexpected demand for energy that cannot be met.
2. Decrease in supply (inward shift in supply curve): For example, an unexpected freeze results in the destruction of orange crops and leads to a drastic reduction in the supply of orange juice.
3. Government intervention: For example, government-imposed 澳洲幸运5开奖号码历史查询:price ceilings result in a diminishment of the supply of various products relative to the increased demand for them at the set price.

To illustrate, causes of a shortage might include the miscalculation of demand by a company producing a good or service, resulting in the inability to keep up with that demand. Or a shortage might occur when🍷 a government requires food rationing.

Natura🧜l disasters that devastate the physical landscape of a 🍬region can also cause shortages of such essential products as food and housing. They can also leading to higher prices for those goods. Global consumer and business trends can also create commodities and labor shortages.

Types of Shortage

Some types of shortages can be found within industries▨ and sectors, for example:

• Food
• Goods
• Housing
• Water
• Labor
• Energy
• Healthcare
• Technology

Drilling dow♏n, there may be a shortage of bread if wheat crops fail due to weather. Necessary personal protective equipment ma📖y become unavailable because of overwhelming demand during a global healthcare crisis. Needed drugs may be in short supply, as well.

Oil can be limited when countries wage💟 war and destro🅘y supply or interrupt trade routes.

Demand for bottled water may dwarf supply in the face of a catastrophic weather conditions or a human-caused disaster that disrupt🍷s or poisons municipal water supplies.

Demand for 𝓀housing, whether a single-family home, apartment, emergency shelter, hotel, or other often outstrips supply, depending on the population level of a geographic area or political climate.

Special Considerations

Shortages are more common in command economies. This is where 🌠the government prohibits the free market from dictating the price of a commodi🔥ty or service based on the forces of supply and demand.

When this happens, an artificially high number of people may decide to purchase that ꧑item because of the low price.

For example, if the government provides free doctor visits as part of a national healthcare plan, consumers mไay experience a shortage of doctor services. This is because people areꩲ more likely to visit a doctor when they no longer have to pay directly for the cost.

Examples of Shortage

Some exam🐬ples of shortages in different markets include the following:

Cocoa Shortage

In 2016, chocolate makers faced a shortage of cocoa beans because of falling supplies of the raw commodity and increased demand for chocolate. In 2015, the global demand for chocolate rose by 0.6% to 7.1 million tons.

However, the production of cocoa from leading cocoa bean suppliers in areas such as Ghana and the Ivory Coast fell by 3.9%, causing the global supply of cocoa beans to fall to just 4.1 million tons. A factor in the increased demand was that consumption of chocolate candy has been on the rise in places like China and India.

Overall, the demand for cocoa in Asia jumped by 5.9% in 2015. As a result, the price of cocoa in 2015 rose to over $3,100 per metric ton, the highest level since 2012. To reverse the cocoa shortage, leading chocolate producers, su🌟ch as Nestle S.A., part🔜nered to educate West African cocoa farmers on best practices and techniques to boost their production.

Cybersecurity Job Shortage

Economic and technology trends can also create job market shortages when the need for workers with new skills increases. For example, the expansion of cloud computing in government and healthcare services has also created an increased risk of cybercriminal activity. Cybersecurity professionals are needed to keep business and government systems safe from ongoing hacker threats. There is, howeౠver,🍰 a shortage of workers with the skills needed to fill this career specialty.

The 澳洲幸运5开奖号码历史查询:U.S. Bureau of Labor Statistics 🎃(BLS) projected 16,800 cybersecurity job openings per year from 2022 through 2032. It also estimated that the demand for cybersecurity professionals would rise by 32% during that decade, a much higher percentage compared to other industries.

The Bottom Line

A shortage occurs when♈ demand outstrips supply. Shortages can relate to products and services in any industry or economic sector. They can involve food, water, housing, energy, medicine, technology, and more.

Some shortages can be alleviated quickly. Others may require the🀅 efforts of companies and governments around the world to resolve.