When there is a shortage, you pay more one way or another

When there is a shortage, the quantity of a good or service demanded is greater than the quantity of that good or service supplied. There isn't enough of the good or service to satisfy all consumers at the market price. For example, see this post from September last year about the market for shearing services. As I wrote in that post, when there is a shortage the market prices tends to move upwards. However, sometimes the sellers are reluctant to push up prices. Perhaps sellers want to ensure that their services remain affordable for everyone (who can access them, given the shortage).

However, one way or another, the buyers are going to end up paying more. As an example, take this New Zealand Herald story from earlier this week:

Whakarewarewa Village resident Kathy Warbrick would have moved heaven and earth for her dog, Tutu.

So when she arrived home from Auckland one night in August to find the 14-year-old fox terrier missing, she grabbed a torch and went searching in the pouring rain.

"I found him huddled on the neighbour's property. He wasn't responding to me."

Warbrick brought him inside and rang her vet, only to be told it was no longer able to provide after-hours services due to staffing shortages...

Warbrick said she was concerned that other pet owners in her position would have found the cost of a drive to Tauranga on top of vet costs too prohibitive and animals would suffer as a result.

Clearly, there is a shortage of after-hours veterinarian services available. Often, shortages are managed by waiting list. If a pet owner has to wait a long time to access services, then that waiting time has a cost (for example, the pet may be suffering while waiting for treatment). The price of services may not be going up, but the cost of accessing services is. If a pet owner has to drive an hour, from Rotorua to Tauranga, to access pet services, the 'full cost' of after-hours veterinarian services (made up of the price paid for the services, plus the additional cost of accessing the services) has increased.

So, while a shortage may not always cause the price of goods or services to increase, the 'full cost' of accessing those goods or services will increase for the consumer. Either way, it ends up costing consumers more.