ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The scarcity principle is related to pricing theory. According to the scarcity principle, the price for a scarce good should rise until an equilibrium is reached between supply and demand. However, this would result in the restricted exclusion of the good only to those who can afford it.

Detailed explanation-2: -Scarcity is important for understanding how goods and services are valued. Things that are scarce, like gold, diamonds, or certain kinds of knowledge, are more valuable for being scarce because sellers of these goods and services can set higher prices.

Detailed explanation-3: -Scarcity, also known as paucity, is an economics term used to refer to a gap between availability of limited resources and the theoretical needs of people for such resources.

Detailed explanation-4: -Demand scarcity: When there is a high demand for a resource or product, due to increasing populations or changes in preferences. Supply scarcity: When the supply or resource is low or out, due to weather, disasters or resource depletion.

Detailed explanation-5: -All goods and services are scarce because the land, labor, and capital used to create them are scarce. No matter what the good or service is, the supplies of land, labor, and capital used to produce it are scarce because each resource has many alternative uses.