In most contexts, a shortage is when there is a gap in supply due to external factors. This results in resource allocation not responsively adapting to price signals.
A commonly used example is milk, yogurt, cream and ice cream. Every year, the farmers produce milk. Some people want yogurt, some want milk, some want cream, &c. Say that one year, everyone wants yogurt for some reason. They are lining up to pay 200%, &c, for it. Then the allocation of resources adapts -- more milk is used to make yogurt. If demand for other products does not go down -- people still want just as much milk, ice cream, &c -- then their prices may go up. Over a reasonable time frame, the effect of this is that more land will be turned over to pasturage and more milk will be produced. Gradually the prices will come down. More people have more yogurt than before; more people are working on that and less on something else (whatever it was). The workers and consumers live happily ever after and resource allocation has adapted to price signals.
One important consideration in the above example is that if people want more yogurt and are willing to pay more, they must also be willing to go without something else. They only have so much money (so much of their own resources to allocate). That is why the resource allocation has to change. Now that might not be milk, per se, but it is probably something adjacent to it, like tofu. We can see how if the shift is from tofu to yogurt, the reallocation of resources might take longer -- people can't just take the milk consumers don't want and turn it into yogurt, they have to get more milk first, which means feeding more soybeans to cows and less to tofu machines -- but it still happens.
A simple example of a shortage is a situation where a virus affects a certain fruit tree, preventing it from growing (or, at least, preventing it from growing the desired fruit). Although people are willing to pay a lot for this fruit, and by extension are willing to consume less of other fruits or other foods, there is no way to turn resources over from the production of other goods to the production of this fruit. It might be that only a small number of areas are isolated enough to produce this fruit; they might all be turned over to it; but after that, there would be no elasticity in the supply of this fruit. Given what we know about the pricing, demand, ordinary cost of inputs for producing the fruit, the supply of this fruit before the virus, we must conclude that there is considerable demand which is not being met.
(Something else notable about the second example is that most of the new, elevated price of the fruit would go into some form of rent. The ground on which the fruit could be produced would be exceedingly rare and valuable, but the material inputs, labor, skill, &c needed for the fruit are the same as before; the new high price would mostly go to the ground rent or financing costs.)
A commonly used example is milk, yogurt, cream and ice cream. Every year, the farmers produce milk. Some people want yogurt, some want milk, some want cream, &c. Say that one year, everyone wants yogurt for some reason. They are lining up to pay 200%, &c, for it. Then the allocation of resources adapts -- more milk is used to make yogurt. If demand for other products does not go down -- people still want just as much milk, ice cream, &c -- then their prices may go up. Over a reasonable time frame, the effect of this is that more land will be turned over to pasturage and more milk will be produced. Gradually the prices will come down. More people have more yogurt than before; more people are working on that and less on something else (whatever it was). The workers and consumers live happily ever after and resource allocation has adapted to price signals.
One important consideration in the above example is that if people want more yogurt and are willing to pay more, they must also be willing to go without something else. They only have so much money (so much of their own resources to allocate). That is why the resource allocation has to change. Now that might not be milk, per se, but it is probably something adjacent to it, like tofu. We can see how if the shift is from tofu to yogurt, the reallocation of resources might take longer -- people can't just take the milk consumers don't want and turn it into yogurt, they have to get more milk first, which means feeding more soybeans to cows and less to tofu machines -- but it still happens.
A simple example of a shortage is a situation where a virus affects a certain fruit tree, preventing it from growing (or, at least, preventing it from growing the desired fruit). Although people are willing to pay a lot for this fruit, and by extension are willing to consume less of other fruits or other foods, there is no way to turn resources over from the production of other goods to the production of this fruit. It might be that only a small number of areas are isolated enough to produce this fruit; they might all be turned over to it; but after that, there would be no elasticity in the supply of this fruit. Given what we know about the pricing, demand, ordinary cost of inputs for producing the fruit, the supply of this fruit before the virus, we must conclude that there is considerable demand which is not being met.
(Something else notable about the second example is that most of the new, elevated price of the fruit would go into some form of rent. The ground on which the fruit could be produced would be exceedingly rare and valuable, but the material inputs, labor, skill, &c needed for the fruit are the same as before; the new high price would mostly go to the ground rent or financing costs.)