What is an example of a shortage?

Answer 1

Two areas of economic shortages of goods are:

1. Government imposed prohibitions on selling goods

Government, though the threat or use of violence, can impose price ceilings on goods it specifies. A common example is though rent controls which make it illegal for two people to come to a voluntary agreement on the price of rent above an arbitrarily, politically determined dollar figure. If the dollar price ceiling is below the market dollar price, there will be a shortage of property availability. This market distortion is in effect in New York City. In that case, although the dollar price is capped, there are other forms of payment accepted to raise the total price of the apartments over the ceiling such as in-kind goods of food, drugs, and even sexual payments. Read futher at mises.org.

1. The good not in production

If the good is not in production, and not in existence, but there is demand for it that may technically be a shortage. There is demand for personal transport technology similar to something in Star Trek, but it doesn't exist.

Also, say during a hurricane there is no power to make ice in an area, the price of ice will rise, but someone else in the world there will be ice but it will cost significantly more to get it there. The price of a good rising is not a shortage of it, but there may be less of it made. Both of these cases are also not 'market failures.' Read further at mises.org.