How does the market eliminate shortages and surpluses?

The market eliminates shortages and surpluses through the forces of supply and demand. When there is a shortage, prices tend to rise, incentivizing producers to increase supply and attracting more resources to the market. Conversely, when there is a surplus, prices typically fall, prompting producers to reduce output or exit the market. This dynamic adjustment helps restore equilibrium, ensuring that the quantity supplied matches the quantity demanded.