Shortages:
exist whenever there is scarcity. indicate that quantity demanded is greater than quantity supplied. cannot exist for inferior goods. cannot exist in a market because the amount sold must equal the amount bought.
At price P3 in the graph above, there is:
a surplus with a tendency for price to fall. a surplus with a tendency for price to rise. a shortage with a tendency for price to fall. a shortage with a tendency for price to rise. an equilibrium with no tendency for price to change.