While it is known that scarcity will influence the price of a good or service (i.e. goods that are highly scarce such as diamonds will have a higher price of goods that are less scarce such as wheat), scarcity also affects price fluctuation.

• When there is a change in scarcity levels, there will be more price fluctuations (i.e. the impact of a price change will be a result in the change in scarcity levels). For instance, if we use the example of oil, if tomorrow there is a discovery of oil reserves in Antarctica that are 30% of the pre-existing oil reserves known to man, then oil suddenly becomes much less scarce and thus the price will fluctuate (downward) significantly compared to if a small well is found with the capacity of generating 10,000 barrels in total.