DRM doesn't create artificial scarcity; DRM is an attempt at enforcing ownership rights, or contracts, depending on how you look at it. Producers want to maximize profit (just like producers of, say, bricks, or cars). To maximize that, they need to balance the highest price people with pay with lower prices that will entice more people to buy. For physical goods, a sale is a sale - somebody can't copy a car. But when somebody buys a song, and then copies it for his friends, that's a (potential) lost sale for the creator.
Artificial scarcity is when monopolies control the supply of a good to maximize prices (this is an example where pricing is influenced by supply). For example, the De Beers company for years controlled the supply of diamonds to keep prices high. Similarly, OPEC controls oil prices by throttling oil production. As you see, artificial scarcity is not connected to whether a good is physical or not. Even stronger, artificial scarcity is meaningless for digital goods, precisely because the marginal cost of production (how much does it cost to produce one extra item) approaches zero.
DRM controls the amount of IP that is available in the market, because without it - information can be copied freely. I would call this artificial scarcity - simply because it artificially makes a resource more scarce .. but perhaps here we have monopolies controlling the supply of a product simply to be able to price an item.
I would argue that that some consumers are at loggerheads with the prospect of paying for IP simply because the cost of production is so marginal (due to the fact that a copy can be made for no cost).
> due to the fact that a copy can be made for no cost
The second or later copies can be made for virtually nothing. The first copy is often very expensive to make. Think about Toy Story or the SMiLE album or Stephenson's books.
Artificial scarcity is when monopolies control the supply of a good to maximize prices (this is an example where pricing is influenced by supply). For example, the De Beers company for years controlled the supply of diamonds to keep prices high. Similarly, OPEC controls oil prices by throttling oil production. As you see, artificial scarcity is not connected to whether a good is physical or not. Even stronger, artificial scarcity is meaningless for digital goods, precisely because the marginal cost of production (how much does it cost to produce one extra item) approaches zero.