Ok. An old question put out 200 years ago by Jean-Baptiste Say, and one usually answered with a 'no'. But can you make a reasonable try at arguing 'yes' strongly and convincingly?
Yes, it has been happening already. Take for example the advent of TV broadcasting in some developing countries. Prior to the days of TV, people were not aware too much of certain products (for example soap or shampoo or face cream or any number of items). People who were not aware of these products had obviously no need or use for them. Via these commercials the advertisers induced a perceived demand on the society. Not all people had the means to afford these new products, but the power to create a need resulted in increasing demand. Thus supply created a demand.
There is also a saying in the United States, "If you build it they will come." This pertained to creation of a baseball stadium in the middle of nowhere (in a rural place). There was no demand for baseball there but after the building of the stadium it started creating one.
Yes, it has been happening already. Take for example the advent of TV broadcasting in some developing countries. Prior to the days of TV, people were not aware too much of certain products (for example soap or shampoo or face cream or any number of items). People who were not aware of these products had obviously no need or use for them. Via these commercials the advertisers induced a perceived demand on the society. Not all people had the means to afford these new products, but the power to create a need resulted in increasing demand. Thus supply created a demand.
There is also a saying in the United States, "If you build it they will come." This pertained to creation of a baseball stadium in the middle of nowhere (in a rural place). There was no demand for baseball there but after the building of the stadium it started creating one.
Thanks. An answer not even in the literature I have.....Great!!!! And obvious, once pointed out.
Yes of course. The demand and supply is determined the price of the goods and service.
Srini, rightly says the demand is created first and then supplied-although there seems a substantive relationship with this-
Supply and demand are short time functions that operate more quickly than processes that might alter the functions.
Reliable supply may eventually increase demand without price change, especially when some other similar product becomes unavailable. It takes time.
Supply and demand are balanced by price in the short time. An over supply will quickly lower the asking price until supply and demand are equal. Sometime later the supply may decrease by decisions of some producers to exit a market.
Markets are not completely efficient. Sudden supply of some new product might not immediately balance with demand at any price. For this reason new products are preceded by marketing campaigns to create demand.
It is always possible to offer a product no one wants to have.
It is the formulation of Say's law that stated ' supply create its own demand'. The rejection of this doctrine is a central component of The General Theory of Employment, Interest and Money (1936) and a central tenet of Keynesian economics.
From wikipedia
The prevalence of supply over demand, and the fight for markets is one vital feature of a capitalist economic system. Not the consumption controls production, but the production determines the consumption; it is not capital for people, but people for capital. If capitalism is able to create a more proportional distribution of production, the market problem can be solved and the productive potential can be further developed.
No supply doesn't always meet demands but of course the creatrion of demands remains interesting.
It depends on several factors. Innovative products create their own demand drives. Yet, if production and marketing are not managed sustainability, the story will be different. Supply may not necessarily create and maintain demand if there are no innovatively created product, creation of good market outlets and sustainable production and demand groups.
No matter how much a particular fashion item is produced, once it goes out of fashion, no amount of production will initiate renewed demand. Obviously, a number of factors are on display. In the west, cereals are commonly eaten for breakfast, and therefore the relative companies make a fortune, but why does supply consist of much the same thing in different shapes? But can we look at society beyond commercial production methods?
I suggest that supply and demand, as a process, can be extrapolated into and onto other factors. Many things, to me, appear evocative of these ideas. Think about politics and religion-do they partake of the same drives, including branding?
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