Which of the following is TRUE in the market for ice cream? a) An increase in price of milk shifts the supply curve to the rifht b) an increase in price of ice cream shifts the demand curve to the left c) an increase in number of sellers shifts the supply curve of ice cream to the right d) a decrease in income shifts the demand curve for ice cream to the right

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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.