Before the shift in demand, the market price (P*) results in quantity demanded and quantity supplied of Q*. When the shift in demand (D to D prime) occurs, the quantity supplied at the market price P* remains at Qs, but the quantity demanded shifts out to Qd. read more
A shortage results from rising prices, a scarcity results from falling prices. A shortage is a lack of all goods and services, a scarcity concerns a single item. A shortage can be removed but a scarcity cannot be removed. read more
People want unlimited goods and services, and there isn't resources available to handle those wants. Therefore, wants exceed resources. read more
Scarcity vs Shortage There are times when a commodity is in paucity in a place. People are confused whether it is scarce or there is a shortage of the commodity. read more