A false shortage is a form of artificial scarcity

Scarcity

Scarcity is the fundamental economic problem of having humans who have unlimited wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals can be...

 induced by a supplier

Vendor (supply chain)

A vendor, or a supplier, is a supply chain management term meaning anyone who provides goods or services to a company. A vendor often manufactures inventoriable items, and sells those items to a customer.- History :...

, often with the intent

Intention

Intention is an agent's specific purpose in performing an action or series of actions, the end or goal that is aimed at. Outcomes that are unanticipated or unforeseen are known as unintended consequences....

 to elevate consumer

Consumer

Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...

 demand

Demand

- Economics :*Demand , the desire to own something and the ability to pay for it*Demand curve, a graphic representation of a demand schedule*Demand deposit, the money in checking accounts...

 above levels that may otherwise be achieved in the absence of such scarcity.

Companies may induce a false shortage to give rise to a common perception

Perception

Perception is the process of attaining awareness or understanding of the environment by organizing and interpreting sensory information. All perception involves signals in the nervous system, which in turn result from physical stimulation of the sense organs...

 of the rarity or uniqueness of a product or service, when they are, in reality, neither precious, nor difficult to produce

Production, costs, and pricing

The following outline is provided as an overview of and topical guide to industrial organization:Industrial organization – describes the behavior of firms in the marketplace with regard to production, pricing, employment and other decisions...

.

Suppliers often stand to gain from a false shortage, because it can help increase consumer demand without a corresponding decrease in price

Price

-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...

, and hence an entity's perceived value

Value theory

Value theory encompasses a range of approaches to understanding how, why and to what degree people should value things; whether the thing is a person, idea, object, or anything else. This investigation began in ancient philosophy, where it is called axiology or ethics. Early philosophical...

. This results in an increase in short-term profit

Profit (economics)

In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...

.