1.5 Economic theory generally holds that in competitive markets price is a function of demand and supply. Describe and give an example of the effect of a shortage of supply as opposed to a shortfall in demand. What would you do as a business manager meeting a mismatch between your supply and customers demand?
Expert Answer
Market is volatile in nature and demand cannot be predicted accurately all the time. There will be a mistatch between demand and supply requirement due to various internal and external factors.One example of variation in demand which results in shortage of supply is
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