Answer to Question #281340 in Economics of Enterprise for DAVID

Question

different between scarcity and shortage

Answer 1

Solution:

Scarcity refers to a recurring natural limitation on the availability of a resource or good. A shortage, on the other hand, is a temporary restriction on the availability of a good resource as a result of intentional human intervention.

Scarcity refers to limited resources, such as oil and water, that can never be replenished through production or importation. It is created by nature, it involves natural resources, it is permanent, and it occurs when something is rare and difficult to reproduce.

Shortages result from the deliberate decision of a producer, seller, or government regulator to reduce the output of a specific resource or good. They are created by the market. They are temporary in nature, involve goods and services, and occur when supply does not meet or satisfy the appropriate demand.