When a product's price is below equilibrium, the result is typically a shortage because quantity demanded is more than quantity supplied. This occurs because at a lower price, consumers are willing to buy more of the product, leading to excess demand.
Here's a breakdown of the situation:
1. Price below equilibrium: When the price is set below the equilibrium price determined by the intersection of the supply and demand curves, it means that the price is lower than what suppliers are willing to sell at and lower than what consumers are willing to pay.
2. Shortage: With the price below equilibrium, consumers demand more of the product than what suppliers are willing to provide at that price. As a result, there is a shortage – the quantity demanded exceeds the quantity supplied.
So, in summary, when a product's price is below equilibrium, a shortage is expected because the quantity demanded is more than the quantity supplied at that lower price.
