What Is Scarcity In Economics? Explained With An Example

what is scarcity in economics

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If you are new to economics, you will wonder what is scarcity and require an explanation with example.

The word scarcity is an economics term which is referred for the gap between the demand and supply.

If you want something which is not available in the market in a big amount, then the thing is scarce.

Because of the scarcity, you have to fulfill your wishes using the available resources.

Example in real life: Water Scarcity In Chennai, India where the groundwater has also scarce. People have to manage everything possible in very few buckets of water.

Why Scarcity Occurs?

  • Scarcity is the basic problem in economics
  • It is when demand is more and the availability is less

Some Practical Examples Of Scarcity

Natural disaster may make Petrol and Diesel Scarce
Scarcity of food because of poor weather
Increase in tax on import can make products scarce

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