Scarcity & Abundance

Scarcity is when there is a very small supply of products that cannot keep up with demand. This can affect a market by causing prices of products to rise, becoming more expensive and causing consumers to make alternative choices i.e. opportunity costs. The market will become more competitive in acquiring products from suppliers who will have the upper hand in getting the price they want. Dis-economies of scale will occur

In contrast, Abundance is when there is a large supply of products that can more than keep up with demand. This can affect a market by causing prices to stay low and at a constant level. Markets will become less competitive as supply will be easy to gain allowing easy access for businesses. Economies of scale will occur.