In page navigation


Updated: Aug 20, 2021

A situation when the demand for a good or service exceeds the available supply. This can only occur if price is not adjusted to clear the market. If there is a sudden rise in the demand or fall in the supply of a good, law or social convention may prevent the price from rising far enough to clear the market, thus creating a shortage. When this occurs, available supplies of the good must be allocated by some non-price method, such as formal or informal ‘rationing, or queuing.

Reference: Oxford Press Dictonary of Economics, 5th edt.

Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.