For example > Supply means somebody did work to create that supply, work means somebody earned wages by creating that supply(producing something which is going to be sold out). Wages is what enable that worker to then demand goods and services from other workers. Which then becomes their wages, and so on.
Yes demand can create its own supply, the Keynesian economist view believed this. Markets will always try to meet demands because they want to gain the most they can from it therefore will create a supply to match demand.
states that supply creates its own demand.
an invisible hand, which meant that the markets seem to regulate themselves and create their own equilibrium, today this is generally known as price and the law of supply and demand.
When a particular commodity is demanded for its own sake it is known as autonomous demand. Demand for house is an example for autonomous demand.
Law of supply: If demand is held constant, an increase in supply leads to a decreased price, while a decrease in supply leads etc
Yes demand can create its own supply, the Keynesian economist view believed this. Markets will always try to meet demands because they want to gain the most they can from it therefore will create a supply to match demand.
its easy, when supply is increased, the price decreases. A decrease in price leads to an increase in demand. So technically supply creates its own demand. Supply function is not what is available for supply, it is clearly defined as "what is the quantity of goods that suppliers are willing to supply at each price". So even if a supplier has ample stock it does not mean it is the supply of that product . Technically supply is fixed by the producer or supplier who fixes it through their willingness. Thus supply is directly proportional to price. If price increases supply increases and vice versa. The logic behind this is if price goes up "having the cost of production at the same level" the profit margin increases. thus to earn more profit more quantity is supplied at high price and vice versa. Thus generally speaking supply cannot create its own demand unless the good is a perishable one which the supplier cannot have more shelf life and it has to come to market causing the price to decrease effecting in high demand.
states that supply creates its own demand.
an invisible hand, which meant that the markets seem to regulate themselves and create their own equilibrium, today this is generally known as price and the law of supply and demand.
When a particular commodity is demanded for its own sake it is known as autonomous demand. Demand for house is an example for autonomous demand.
Law of supply: If demand is held constant, an increase in supply leads to a decreased price, while a decrease in supply leads etc
its easy, when supply is increased, the price decreases. A decrease in price leads to an increase in demand. So technically supply creates its own demand. Supply function is not what is available for supply, it is clearly defined as "what is the quantity of goods that suppliers are willing to supply at each price". So even if a supplier has ample stock it does not mean it is the supply of that product . Technically supply is fixed by the producer or supplier who fixes it through their willingness. Thus supply is directly proportional to price. If price increases supply increases and vice versa. The logic behind this is if price goes up "having the cost of production at the same level" the profit margin increases. thus to earn more profit more quantity is supplied at high price and vice versa. Thus generally speaking supply cannot create its own demand unless the good is a perishable one which the supplier cannot have more shelf life and it has to come to market causing the price to decrease effecting in high demand.
One of the main critiques is on say's law, which is that supply creates its own demand. In a nutshell Keynes was able to explain the great depression by saying that demand creates supply. This is extremely simplified.
major businesses and people own it and runs it according to supply and demand
If supply is greater then the demand then the price is lower but if the demand is higher then the supply then the price is higher due to rarity. :)
Her conceit was obvious to everyone in the room.
Price Mechanism Price mechanism is the point which equilibriates supply and demand within a market. It is a mechanism of pricing.The price mechanism is one which allows the prices of good and services to be decided by the interplay between supply and demand. There is no centralised price fixing. The price mechanism is the concept that the free market, when left to its own devices, will formulate fair prices of the goods or services on its own by the natural laws of supply and demand.