What effect does a shortage have on the price of goods and services?

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When there is a shortage of a particular good or service in the marketplace, the price of that good or service goes up. A shortage of a good or service means more people want that good or service than the number of that good or service is available. This limited availability means the supplier of the good or service can raise prices on the good or service (within reason) and is still able to sell the good or service to buyers. This increased price may make fewer people able or willing to purchase the good, which would minimize the shortage. Shortages can also lead to long lines waiting to get a good or service or could create a black market for a particular good or service. Price ceilings are sometimes the cause of shortages, and are discussed more in the link provided.

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