Difference Between Scarcity and Shortage
All profitable training is made up of the same things: production, distribution, and consumption. These three factors, if managed effectively, can result in the efficient use of resources within a given organization. However, even the most efficient organizations suffer from time to time from some form of scarcity or shortage.
Note that there is a difference between scarcity and shortage and we will explain how they differ in this article. But first, let’s look at their definitions.
Definition of Scarcity
By definition, scarcity is something that is naturally unavailable. This answers the question – how is scarcity different from shortages?
One of the most common natural resources on earth is crude oil. It is extracted in very large quantities every day around the world. According to reliable sources, it is estimated that there will be a drastic shortage of crude oil after about 50 years, judging by the amount that remains on earth. When that happens, it will be termed “scarcity of crude oil”, because it is a natural substance…
Definition of Shortage
Let’s go back to another example of crude oil. If the crude oil companies were to go on strike, there would be a shortage of crude oil and its products because there is little or no supply of it. Any limited amount that is in circulation in the market would be sold at a very exorbitant price. This will continue until the strike is called off and there is sufficient supply to meet demand. This case is a typical example of a shortage; the shortage of oil has been caused only by human activities and not by nature.
It is therefore defined as the unavailability of something at a given time as a result of adverse human actions.
If asked “what is the difference between scarcity and shortage?”, these definitions are sufficient to answer the question. They are more or less an introduction to the difference between shortage and scarcity.
Scarcity vs Shortage Comparison Table
One look at this table and you’ll understand and be able to answer the question – what is the difference between a shortage and scarcity? This will also help you to see and refer to these terms professionally, especially in a formal setting.
|Basis of Comparison||Scarcity||Shortage|
|Meaning||Availability of a resource in a finite quantity in its natural form||A state of demands being higher than supply|
|Causes||Mostly nature||Market conditions initiated my human|
|Duration||Permanent or lasts for a long time||Temporal|
|Applies to||Mostly naturally occurring substances like gold, silver, etc||Man-made goods and services|
Conclusion of the Main Difference Between Scarcity vs Shortage
Have you ever asked yourself – “what is the difference between a shortage and scarcity?” Now you have your answer. To avoid mixing things up and using words interchangeably. You should note that the nature of the substance, goods or services largely explains how these terms are different from each other.