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Glossary
Try This: Identify Shortages and Surpluses

So, when a price is too high—that is, above its market equilibrium—a surplus will result.

When a price is too low—that is, below its market equilibrium—a shortage will result.


For each question below, interpret the graph and then click 'See answer' to check your answer.

Would a price of $2.00 result in a surplus or a shortage?


Surplus
What is the quantity of the surplus or shortage?


There is a surplus of 400. At $2.00 the quantity supplied is 500 and the quantity demanded is 100.
Would a price of $0.40 result in a surplus or a shortage?


Shortage
What is the quantity of the surplus or shortage?


There is a shortage of 400. At $0.40 the quantity demanded is 500 and the quantity supplied is 100.