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Asked Sep 11, 2019
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When a shortage is eliminated, the market returns to an      where the quantity supplied equals the quantity demanded

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Expert Answer

Step 1

Shortage: Shortage refers to the condition where the demand for a commodity is greater than the supply of commodity. It shows that people are more willing to buy at the current price than the availability of goods.

Step 2
  • Equilibrium point.

The market is not in equilibrium when there is a condition of shortage. However, the elimination of shortage s...

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Price Equilibrium point At price P2, the |demand is greater than | supply P1 P2 Q1 Q3 Q2 Quantity Shortage

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