ENTREPRENEURSHIP

Detailed explanation-1: -Scarcity is one of the key concepts of economics. It means that the demand for a good or service is greater than the availability of the good or service. Therefore, scarcity can limit the choices available to the consumers who ultimately make up the economy.

Detailed explanation-2: -A shortage occurs when demand exceeds supply – in other words, when the price is too low. However, shortages tend to drive up the price, because consumers compete to purchase the product. As a result, businesses may hold back supply to stimulate demand. This enables them to raise the price.

Detailed explanation-3: -There are three chief causes of scarcity in the economy: Demand scarcity: When there’s a high demand for a resource or product, because of 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-4: -Scarcity happens when the demand for a natural resource, product or service exceeds the supply.

Detailed explanation-5: -Demand-induced – High demand for resource. Supply-induced – supply of resource running out. Structural scarcity – mismanagement and inequality. No effective substitutes. 17-Oct-2019