Question

At what price does Shortage and Surplus occur ? Once a market has shortage and Surplus, then what happens to the market price?

Answer 1

There is a surplus when the price is above equilibrium, which allows sellers to lower their prices in order to remove the excess.
There will be a shortage at any price below equilibrium which leads to an increase in the price of the good.

A market surplus occurs when there is excess supply- the quantity supplied is greater than the demanded quantity. A few producers will not be able to sell all their goods in this situation. That will induce them to lower their price in order to make their product more attractive. Many companies would lower their prices in order to stay competitive thereby reducing the selling price for the commodity. Consumers will increase their demanded quantity in response to the lower price, moving the market toward an equilibrium price and quantity. In this situation the excess supply has put downward pressure on the product's price.

A market shortage occurs when the demand is excessive- the quantity required is greater than the quantity provided. Consumers will not be able to buy as much of a good as they wish in this situation. In response to market demand, manufacturers will increase both their product's price and the amount they 're willing to supply. To certain customers the price rise will be too much and they won't demand the commodity any more. While the increased amount of product available would please many customers. Eventually equilibrium should be struck.