Suppose the market for pizzas is unregulated. That is, pizza prices are free to adjust based on the forces of supply and demand.

If a shortage exists in the pizza market, then the current price must be _____ than the equilibrium price. For the market to reach equilibrium, you would expect _____.

 

If a shortage exists in the pizza market, then the current price must be higher than the equilibrium price. For the market to reach equilibrium, you would expect an increase in the quantity supplied.

A shortage in the market implies that the quantity demanded is more than the quantity supplied. Higher demand drives the prices to increase and hence the current prices in the market will be more than the equilibrium price. To bring back the market to equilibrium, the quantity supplied of the pizza should be increased.