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.



Use the graph above to answer the following questions. Click on each question to reveal its answer: 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.