ABSTRACT
Each of the factors of production has a price, as do the raw materials which each organization uses.
■ In simple terms, the more abundant the factor or material, the less it will cost. ■ The scarcer it becomes, the more expensive it becomes. ■ If there is no market for it, i.e. if no one wants it, then scarcity will have little or
no effect on price. For example, if fur-bearing animals are scarce, but people give up wearing fur for ethical reasons, then the price of fur will not be high.
