What is a shortage?⁠⁠

Shortage, in economic terms, is a condition when demand exceeds supply.

There are three main factors of shortage:
1. Decrease in supply*
2. Increase in demand**
3. Government intervention***

*Unforeseen drought leads to crop damage, causing insufficient supply of products made of the crops.

**Sudden and long-lasting power outage caused by natural/man made reasons may ignite a need in generators, a need that can’t be met under current market conditions.

***Government intervention, for example imposing so-called price-ceiling:

E.g. When the government wants to set a certain fixed level of prices which can’t be exceeded by sellers. If the price is less than a point of quantity-supply equilibrium, it will lead to goods deficit, simply due to the fact that the buyers want to buy much more amount of goods that the sellers want to sell. Eventually it leads to standing hours and hours in lines and not actually buying but trying to get, searching for needed goods all over the town. (Welcome back to late Soviet time)