Not only does it not break down, but situations with scarce resources are actually when the free market is most useful. It creates an efficient way to allocate

Not only does it not break down, but situations with scarce resources are actually when the free market is most useful. It creates an efficient way to allocate those resources while avoiding shortages and creating incentives to develop alternatives. It's not perfect, as it can result in scarce resources going to those with the most money rather than those with the most need, but the track record compared to alternatives is pretty good.