If cheese is an inferior good, which of the following must be true? O The demand curve for cheese is horizontal O A decrease in consumer income will decrease the supply of cheese O An increase in consumer incomes will decrease the demand for cheese O An increase in the price of cheese will decrease the supply of cheese O The demand curve for cheese is vertical

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Market Surplus and Shortage Analysis

In everyday language, a “surplus” indicates that there is an excess of something, while a “shortage” means that there is a scarcity of it. In economics, “market surplus” refers to the condition where the quantity of a certain good more available than what is required or “demanded” by the market. In the same way, a “market shortage” refers to the condition where the quantity of a certain good is less available than what is “demanded” by the market. If quantity in demand is written as Qd and quantity that is supplied is written as Qs, then, the condition Qs > Qd indicates market surplus and condition Qd > Qs indicates market shortage.