Scarcity, often referred to as paucity, is a term that relates to a disparity between limited resources’ availability and people’s theoretical needs for them. As a response, organizations are required to determine how to manage a limited resource properly, that the majority of wants and needs are addressed. With this, every resource that has a non-zero cost in the consumption process can be regarded as scarce to some extent.
In an ideal world, economists wouldn’t be needed if every resource on the planet was sufficient. There would be no need for resource allocation decisions, and trade-offs would be unnecessary. Sadly, reality does not function in this manner. Every product has a cost; in short, every resource on the planet has a level of scarcity.
Scarcity, in general, enables the commodities’ value to rise. This is because products in short supply are more appealing. People occasionally want things they can’t have, which is a regular scenario in real life. As a result, marketers benefit from the fact that people view limited-supply goods as appealing to enhance sales.
In business and economics, scarcity is among the most important factors. It can change the way companies use resources, make products, and manage their employees. Knowing scarcity and how it may impact you is critical to running a successful business. Scarcity has effects beyond products and natural resources. Anything that can be used can be classified as a resource. Even time is considered a resource in some instances. As such, time is susceptible to scarcity rules as well.