What is Manufactured Scarcity?
In: Economics
It’s a way to increase the price by real or perceived scarcity of the good. Diamonds are not that uncommon, but for about 150 years, DeBeers has tightly controlled supply to maintain the inflated price. Many luxury goods are not constrained by physical supply (i.e. there’s nothing inherently complicated or scarce about leather needed to make a Birkin bag), but by only releasing a few per year, you can command a much higher price than if you flooded the market, because buyers pay for the fact that there’s only a few of them available.
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