In the context of market equilibrium, what is the term for a situation where the quantity supplied is less than the quantity demanded at a given price?

• A. Price ceiling
• B. Shortage
• C. Surplus
• D. Equilibrium

Answer: (B)

Verified step by step guidance

1. Understand the definitions of key terms related to market equilibrium: 'Price ceiling', 'Shortage', 'Surplus', and 'Equilibrium'.
2. Recall that 'Equilibrium' occurs when quantity supplied equals quantity demanded at a certain price.
3. Recognize that a 'Price ceiling' is a government-imposed limit on how high a price can be charged, which can lead to market distortions but is not itself the term for quantity imbalances.
4. Identify that when quantity supplied is less than quantity demanded at a given price, there is not enough product available to meet consumer demand, which is called a 'Shortage'.
5. Confirm that a 'Surplus' is the opposite situation where quantity supplied exceeds quantity demanded, so it does not apply here.