Home > The Oxford Dictionary of Economics > scarcity
scarcity
scarcityThe property of being in excess demand at a zero price. This means that in equilibrium the price of a scarce good or factor must be positive. At first sight one might expect that a good or factor that was never scarce would not be counted as an economic good at all. Some factors of production are counted as economic goods, however, because it is not known in advance whether they are going to be scarce. In a linear programming model, for example, constraints are included, which may turn out to be effective constraints, with positive prices, or not, according to the objective function assumed and the amounts of other factors available.
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