Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / The price of a good increases when it becomes relatively more scarce

The price of a good increases when it becomes relatively more scarce

Economics

The price of a good increases when it becomes relatively more scarce.

(a) true

(b) false

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

This statement is true.

The price of a good is determined by the supply and demand of that good. Assuming that the demand for the good is fixed, the main diver is the supply. When the supply of a specific good decreases (because it becomes more scarce) the supply curve shifts to the left. This supply curve shift leads to an increase in prices. Therefore, when there is less supply of a good, the price tends to increase.