Suppose that Milwaukee builds a light rail system. Draw a supply and demand graph of the market for used automobiles in Milwaukee on the axis below. Then show which curve shifts on the graph (supply or demand) in response to the light rail system, and explain briefly how the change will affect price and quantity (other things remaining equal). Make sure to label all curves and values in the grap

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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.