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Which of the following indicates that there is a shortage in the market? Demand is rising....

Which of the following indicates that there is a shortage in the market?

Demand is rising.

Demand is falling.

Price is rising.

Price is falling.

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Answer #2

Demand is Rising

A Market Shortage occurs when there is excess demand- that is quantity demanded is greater than quantity supplied. In this situation, consumers won't be able to buy as much of a good as they would like. In response to the demand of the consumers, producers will raise both the price of their product and the quantity they are willing to supply. The increase in price will be too much for some consumers and they will no longer demand the product. Meanwhile the increased quantity of available product will satisfy other consumers. Eventually equilibrium will be reached.

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