Scarcity vs. Shortage: Economics is the branch which deals with the determination of distribution, production and consumption of the staff produced by different organizations and companies. This field involves a lot of different terms. Scarcity and shortage are one of those. The main difference between scarcity and shortage is that scarcity is the limitation of something in its natural form, while shortage is a situation in which the thing needed cannot be obtained at that time.
Let’s take a closer look at Shortage versus Scarcity
|Nature||Scarcity is permanent, while shortage Is Temporary|
|Created By||Scarcity Is created naturally, while shortage is by market|
|Used For||Scarcity is used for natural resources and shortage of products and services.|
|Result From||Scarcity results from falling prices, while shortage comes from rising prices.|
Table of Contents
What is Scarcity?
If we look at scarcity meaning, it can be explained as something which is available in a very limited amount in its natural form. And the thing which is not present in its existing form is known as scarce. For example, oil is obtained from the earth, which is present beneath its surface. Oil companies worldwide spend tons of money to extract that oil from the earth in its possible shape. Once they obtained it, they sold it to other local companies, and then those companies sold it to the consumers. This whole process takes a lot of time and various processes, and people have to pay for it. So, oil is scarce. Because if you are paying for something natural, it means it is scarce.
What is Shortage?
If we look at shortage meaning, it can be defined as a situation in which something that is needed is not available in sufficient amounts. This can be because of many different reasons. For example, if a farmer goes on strike, then the stuff related to the farm, like milk, will be short for that period. And it will stay short until the strike is over. And once it is over, the same thing can be obtained again. There are many different examples which can explain the shortage. Like if the price of a product goes up because it is not available in the market and the companies want it to sell at higher prices. But that product has more demand in the supply chain than it is considered to be short. But when the sellers start making the products again and increase the production amount, then it won’t be short. Shortages are mostly created by the sellers so that the prices can go higher.
5 Key Differences Between Scarcity and Shortage
|Definition||Scarcity refers to a state or condition where something is available to a finite quantity at a particular time.||A shortage is a condition in which the thing that is needed is not available during that time period.|
|Occurrence||Scarcity occurs when something is very difficult and rare to||A shortage occurs when the supply does not satisfy the demand|
|Best Scenario||Oil or water is scarce. And if the companies are not able to provide oil or clean water, then that would be a severe scarcity, same as other stuff like gas or minerals.||The best scenario to explain shortage is that if farmers go on a strike, it will be difficult to obtain milk, and during the strike, milk will become short.|
|Existence||Scarcity can be referred to as something which is not present in an infinite amount in the atmosphere to deal with the needs of humans.||While shortage has a lot of existence but at some particular time, it is not available for everyone.|
|Overcome||Scarcity cannot be overcome easily because the scars are very difficult and rare to reproduce.||Shortage can be easily overcome by dealing with the suppliers or the producers making the products.|
Scarcity vs. Shortage Similarities
- Whether it is scarcity or shortage, both of these terms are interrelated and have something to do with supply and demand.
- Both can result in some harmful consequences for the general people.
Scarcity vs. Shortage Examples
- Land – Unavailability of fertile land to produce and grow food
- Water – drying up of rivers and lakes
- Air – Global warming and air pollution
- Power shortage
- Healthcare shortage
- Food shortage
- Products shortage
Scarcity vs. Shortage Pros and Cons
Scarcity Pros and Cons
Pros of Scarcity
- Scarcity is what keeps you more focused because it can trigger your attention to gain something you need.
- Unemployment caused by scarcity can be effective for some people to take their life more seriously and practically.
Cons of Scarcity
- Even the thought of scarce resources like food or water can affect mental health.
- Scarcity of vital resources may not only reduce performances and energy to work, but in some cases, it can be fatal as well.
Shortage Pros and Cons
Pros of Shortage
- During a shortage, the demands for the goods become high, which is favorable for sellers to charge more for the goods.
- Moreover, the higher prices also motivate the sellers to supply more of the products.
Cons of Shortage
- Shortage can make the prices go high, which means the products go out of the range of common people.
- Shortage of vital services can even lead to loss of life, home and current wealth.
The terms scarcity and shortage are used interchangeably often as these are both linked to the same field and also have something to do with it. But when we talk about scarcity versus shortage, both are different from each other in many ways. Scarcity refers to all resources which are limited in nature, while shortage is made by man itself, where there is a lack of goods or services in the market due to increased demand. There are various scarcity vs. shortage differences, like scarcity cannot be controlled, but shortage can be controlled easily. Moreover, both these terms also have different outcomes. The shortage may be resolved, but if scarcity is long-term, it can even lead to loss of life.