Saturday Brain Storming Thought (176) 17/06/2023
SCARCITY VALUE
Scarcity Value is the increased value of something when there is not much of it available
Scarcity Value is an economic factor describing the increase in an items relative price by a low supply
Examples of Scarcity Value
Gold
Oil
Silver
Other fossil fuels
When demand exceeds the supply, these resources become scarce and prices can go up
Diamonds, command a high price because of their limited availability and control of their market
Absolute Scarcity
It refers to physical limitations of resources
Relative Scarcity
It refers to the value we place on resources
Scarcity at zero price
Scarcity exists even when certain goods are available at zero prices
This is because the availability of goods or services at zero prices does not mean they are unlimited or free
There are still costs associated with producing and distributing these goods, which means they are not entirely free
Scarcity creats value
Scarcity increases the value of product or service
Causes of Scarcity
1) poor distribution of resources
2) personal perspective on resources
3) rapid increase in demand
4) rapid decrease in supply
Scarcity Principle
It is an economic theory that explains the price relationship between dynamic supply and demand
Theory of Scarcity
The scarcity Principle is a theory in economics that maintains that scarcity in the supply of a product and high demand for that product cause a discrepancy in the supply and demand equilibrium
Law of Scarcity
Law of Scarcity simply states : if what we desire appears to be in limited supply, the perception of its value increases significantly
No Scarcity
For without scarcity, no need for choice, either individual or collective, exists
One need not make a choice between buying a nice lunch at restaurant and buying a new sweater because one will always have enough resources to purchase both goods
Scarcity and Shortage
Scarcity refers to the existence of limited resources that are not enough to address unlimited human needs or demands
Shortage refers to an occurrence whereby the order in the market outdoes the supply available at a given time
Permanent of Scarcity
Scarcity is not permanent
Solutions to Scarcity
1) economic growth
2) reduce our wants
3) use our existing resources wisely
Father of Scarcity definition
Lionel Robbins gave the scarcity definition of economics
Key Takeaways of Scarcity
1) the scarcity Principle is an economic theory that explains the price relationship between dynamic supply and demand
2) according to the scarcity Principle, the price of good, which has low supply and high demand, rises to meet the expected demand
3) marketers often use the principle to create artificial scarcity for a given product or good – and make it exclusive – in order to generate demand for it
Causes of Scarcity
1) overconsumption of resources
2) rising demand when supply remains same
3) reduced supply due to economic or environmental reasons
4) government interventions
Types of Scarcity
1) excess demand
2) exclusivity
3) urgency
4) rarity
Fear of Scarcity
A scarcity mindset is the belief that there will never be enough, resulting in feelings of fear, stress and anxiety
Culture of Scarcity
It is a culture preoccupied with lack, in which the focus is on your inadequacies, and there isa perpetual felt sence of never enough
Scarcity and Choice
Scarcity refers to the finite nature and availability of resources
Choice refers to peoples decisions about sharing and using those resources
Scarcity and Growth
Scarcity – the condition we face with limited resources to satisfy unlimited wants, which compels us to choose among alternatives
Economic growth raises standards of living, even in the continuing face of scarcity
Scarcity Marketing
Scarcity Marketing is the idea of limiting the supply of a product, whether it be through restricting availability to a certain time frame or decreasing production – oftentimes both
Scarcity Strategy
Scarcity marketing is a strategy used by businesses to increase the perceived value of products by reducing supply or by creating scarcity around offers on products
Scarcity MCQ
Scarcity of resources refers to the situation where resources are limited in quantity and have alternative uses in production of various commodities
Examples of Scarcity
1) Land
2) Housing
3) Overuse
4) Commodities
5) Water
6) Labour
7) Healthcare
8) World health issues
9) Seasonal Shortages
10) International diplomacy
11) Weather and natural desasters
12) Fixed roadways
Absolute Scarcity
It describes resources that are fixed in supply and cannot be increased or decreased, regardless of demand
Scarcity and Market Failure
With scarcity, there isa potential for Market Failure
Firms may not think about the future until it is too late
Therefore when the good becomes scarce, there might not be any practical alternative that has been developed
In times of Scarcity
1) Lions will travel great distance in search of food
2) Old properties in the town have acquired a scarcity value
3) there is great scarcity of food in the drought stricken areas
Effect of Scarcity
1) Higher value on the object that are scarce
2) Lower value on objects that are available in abundance
Compiled by
Compiled by:
Er. Avinash Kulkarni
9822011051
Chartered Engineer, Govt Regd Valuer, IBBI Regd Valuer