The concept of needs, wants and scarcity is the basis of Business Activity. Their is a slight difference between needs and wants. Needs are essential things one needs to survive, yet wants are the things that people believe they need but are put under the category of luxuries. For example, a person needs water for survival,but it does not need soda; yet he/she believe that soda is also something he/she needs.
This difference between needs and wants is well elaborated by the concept of scarcity. It describes the ratio of needs and wants. It explains that people have more wants yet lesser resources o fulfill them.
