The scarcer the good, the greater its relative substitution value.

Question

Quizplus · Accepted Answer

Scarce goods are those that are limited in availability or supply, which makes them highly sought after. As a result, the price of scarce goods increases, and consumers are more likely to substitute a similar, but more readily available, good for the scarce one. This means that as the scarcity of a good increases, its relative substitution value also increases. Therefore, the statement is true.

The Scarcer the Good, the Greater Its Relative Substitution Value