You are the operations manager at a growing start$-$up with a limited budget, time, and workforce. Your team is considering two innovative projects, but you can only pursue one due to resource constraints. This situation requires you to carefully assess the opportunity cost of each project$$recognizing that choosing one means sacrificing the potential benefits of the other.

Which of the following best defines scarcity and explains its significance in economic decision$-$making in this business setting?

Scarcity suggests that resources are abundant, so the decision$-$making process does not need to consider trade$-$offs between different projects.

Scarcity means that resources are unlimited, allowing managers to fund every project without concern for trade$-$offs.

Scarcity refers to the limited availability of resources relative to infinite business opportunities, forcing managers to make trade$-$offs when allocating these resources.

Scarcity implies that resources are so limited that businesses should only focus on one project regardless of its potential return, ignoring the benefits of alternative projects.