Is there a surplus or a shortage of leather jackets?
surplus shortage
A store has 20 leather jackets for sale. Each jacket costs $70. At that price, 18 people want to buy one.
There is a surplus if there is too much for sale at a given price.
There is a shortage if there is not enough for sale at a given price.
Surpluses and shortages usually happen when people who are selling goods or services charge too much or too little.
When the price is too high, consumers will not want to buy much of the good or service. The quantity demanded will be less than the quantity supplied. So, there will be a surplus.
When the price is too low, too many consumers will want to buy the good or service. The quantity demanded will be more than the quantity supplied. So, there will be a shortage.
At the current price, there are too many jackets for sale. There are 20 jackets for sale, but only 18 people want to buy one.
So, there is a surplus of jackets. The store will not get any money for the leftover jackets.