If there is a cupcake scarcity in your kitchen, there are hardly any cupcakes around, and you're not sure that any will be appearing any time soon.
The noun scarcity comes from the adjective scarce, which means "restricted in quantity or availability." So scarcity is the state of there being very little of something. During a war when shipping gets interrupted, there might be a fuel scarcity, pushing people to carpool or ride bikes instead of driving. If you're in a room full of super boring people, you might say there's a scarcity of good conversation.