Supply and Shortage:  

Equilibrium occurs when at a price where quantity demanded equals quantity supplied. In other words, if there is some price where the amount buyers wish to buy is the same as the amount sellers wish to sell, then equilibrium occurs.

Movements along the curve will occur because there has been a shift in either the quantity demanded or supplied , causing a surplus or shortage in the market, as market forces cause price to either rise or fall, consumers or producers will respond to the changing price altering the quantity they wish to buy or sell. A surplus, from the supply and demand perspective, is a situation where, at the current price, quantity supplied exceeds quantity demanded. The current price must be lowered for the market to reach equilibrium.

A shortage is simply the opposite of a surplus. It is a situation where, at the current price, quantity demanded exceeds quantity supplied. The current price is unsustainable and must be raised in order for the market to reach equilibrium. The important thing to remember about markets is that there is almost always some form of time lag between the changes in both demand and supply and the ability of consumers or producers to react to the changes. A fall in demand leads to a surplus of a good being available. Producers will take time to recognize the change in the patterns of demand and adjust their production levels accordingly. The changing market situation will lead to sales of that good being less than the amount supplied - a surplus. When surplus stocks exist there is a tendency or pressure on prices to fall to try to offload the surplus. As prices fall, some consumers may be tempted back into the market whilst producers start to adjust supply and cut back given that they now recognize that the good is not in such strong demand. The process continues - market forces will act on price - until a new equilibrium is reached.