Why Does an Economic Problem Arise? Explain

By Shivank Goel|Updated : September 7th, 2022

An economic problem arises when the resources are not enough to fulfill the desire of the consumers. The production of goods and services should be enough to satisfy the level of consumer demand. When it is not, dissatisfaction among the consumers arises, and it leads to a situation of economic problems. Find out more about why an economic problem arises here:

  • The situation of economic problem arises when the resources are not enough to fulfill consumer demands.
  • The scarcity of essential resources such as land, capital, labor, etc. can lead to economic problems.
  • When consumer demand grows in a disproportionate manner, the existing resources might deplete, causing economic problems.

Reasons Why Economic Problems Arise

There can be many reasons why economic problems arise. The basis of economic problems is disproportionality between resources and consumer demand. When consumer demand is unlimited or disproportionately high, the existing resources would not be enough to satisfy the demand. Similarly, when there is a scarcity of resources like land, labour, and capital, consumer demand will remain unfulfilled. As a consequence, economic problems will arise.

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FAQs

  • The reason why economic problems arise is the disproportionality between resources and consumer demand. When consumer demand remains unmet due to scarcity of resources, or irrationally high demand, economic problems will arise.

  • Economic problems are conditions in which consumer demand remains unfulfilled. This can be the case when there is a scarcity of resources in the market or the demand is abnormally high.

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