ELI5: Explain Like I'm 5

Demand shortfall

Okay, buddy! Imagine you have ten candies and you want to sell them to your friends. You think everyone wants them, so you ask ten friends if they want to buy one candy each. However, only six friends say yes, and the other four say they don't want any.

This is what we call a "demand shortfall." It means that there are not enough people who want your candy to buy all ten. As a result, you might have to lower the price, so more people will want to buy it, or you might end up with extra candy that you can't sell.

This happens in the real world when companies make products or offer services, but not enough people want to buy them. It might be because the price is too high, or the product isn't as good as people expected. When there is a demand shortfall, it can lead to a loss of sales and revenue for the company. That's why companies try to make sure that what they're offering is something that people actually want and are willing to pay for.