According to economists, the value of something is influenced by its utility and what additional factor?

The value of something, particularly in the context of economics, is significantly impacted by utility and scarcity. Utility refers to the usefulness or satisfaction that a good or service provides to a consumer. However, the concept of scarcity adds a vital layer to this understanding. Scarcity means that the availability of a resource or item is limited relative to the demand for it.

When an item is scarce, meaning there is not enough of it to meet the desire for it, its value tends to increase. This is because people place a higher value on things that are rare or in limited supply. For example, a limited edition item or a piece of art that is one of a kind may be highly valued due to its scarcity. In contrast, if an item is abundant and widely available, even if it has utility, it may not hold significant value because many people can obtain it without difficulty.

While demand also influences value, it works in conjunction with scarcity. An item may be in high demand, but if it is also plentiful, the value may not increase as much. Therefore, scarcity is the correct additional factor that, along with utility, substantially influences the value of something.