Shortage in Supply-Demand Diagrams

Steps:

• Define shortage as quantity demanded exceeding quantity supplied at a given price.
• Identify equilibrium where demand and supply curves intersect.
• At price P, check if demand curve lies above supply curve (QD > QS).
• Select diagram showing this imbalance.

Why A is correct:

• Diagram A positions price P below equilibrium, so QD > QS, causing a shortage per the law of supply and demand.

Why the others are wrong:

• B: Price P above equilibrium, QS > QD, creating surplus.
• C: Price P at equilibrium, QD = QS, no shortage.
• D: Shows demand shift but no QD > QS at P.

Final answer: A