Scarcity

Definition

Scarcity refers to the limited availability or shortage of resources (such as time, money, or goods) compared to unlimited wants or needs.

Analogy

Imagine you're at a concert where there are only 100 tickets available for sale. Because there's scarcity (limited availability) of tickets but many people who want them (unlimited wants), the demand for these tickets will increase significantly.

Related terms

Demand: Demand represents the quantity of a product or service that consumers are willing and able to purchase at various prices during a specific period.

Supply and Demand: Supply and demand describes the relationship between the availability (supply) of a product or service and consumers' desire (demand) for it.

Economic Incentives: Economic incentives are rewards or penalties designed to motivate individuals or groups to take specific economic actions.