What is Scarcity?
1 Answer
Scarcity is an economic factor. It depends on location, distribution, competition and a lot of other things, like wantedness. Amongst other things, it influences price.
Let me give you an example :
You've been out in the desert and your water supply has run out. A local water seller (THE local water seller, because he is the only one) can ask just about any price for his water, because water is scarce and he owns it. (BTW: In The Netherlands we don't have that problem - joke).
If there were another water seller in this oasis you might be able to negotiate, but chances are that they've make a deal (trust).
But if more people got into the water-selling business, the price would go down.
In short
Scarcity means a limited amount of some commodity is present, and, depending on need or wantedness in that particular situation, there will be a struggle between amount and price.
And there's a chance of competition.
