Practice prompt · Q:economics-and-market-foundations/compute-shortage-001

Compute a price-specific shortage

Compute excess demand and distinguish it from scarcity, a seller stockout, and observed unfilled orders.

Updated Aug 7, 2026 Review due Nov 7, 2026

Practice

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Under Linden's baseline demand and supply functions, how should the market be described at $50 per chair?

Choose the best answer. a A 200-chair-per-week shortage because quantity demanded is 900 and quantity supplied is 700 at $50; this does not by itself prove a stockout or count unfilled orders. b A 1,600-chair shortage because the two quantities should be added. c Scarcity begins at $50 and disappears at the $60 equilibrium.

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Answer: a

Choice a. At $50, Qd = 900 and Qs = 700, so excess demand is 200 qualifying chairs per week under the model.