Muthoka, first of all it may be difficult to find an example when there is neither demand nor supply, and then something comes first. This is similar to the question, whether chicken or egg was the first. Economic theory is about market price to balance them if both exist.

But there are some exclusions. Let us consider them. Suppose people in distant village need electricity. It is not a new service but there is no connecting electric line. Another example: a necessity of dam for irrigation in dry region. By the way, hydropower station can solve both problems. But it needs huge investment. Then the investor (even if the government does it) needs to calculate demand for affordable price and make optimal investment plan.

Mobile phone or internet  are opposite examples. There was no demand before they have been invented. So the initial demand there was driven by emerging supply, and then markets started to develop. Such markets for innovative products, especially when network effects are present, may need some financial support. The price for user when this number is low becomes prohibitively high, but may become normal when this number grows. Public support of such innovator is an issue of economic policy.

As Alfred Marshall stated, they come simultaneously.   He compared the two curves to blades of scissors....both are necessary

First of all let me tell you it's not "just a thought" it is a great question that every citizen - whether policymaker or not - should ask himself. I do agree with all Yuri had said and will not add anything on the matter of demand and supply.

I will try to add some thought about "distributional" effects of economic policy measures that are very much left out by textbook economics because they do not enter into the standard supply demand mechanics. Distributional effects do not enter there (as they should) because they do not assume "the market" or "the demand" as a homogeneous category but they deal with "who can (afford, benefit, pay,...)" and "who cannot or will not".

Distributional considerations compel the policy maker to ask not only "how much debt for such and such a project" but who is in and who is out. Are we planning sewage network only in cities and paying it out of general taxes. That means that citizens not living in cities will be bound to pay for something they will not have. Is this what we want?

And here political economics, voting, bribing comes along.. but it is the same questions across infrastructures - be it sewage, roads, schools, hospidals, power stations, ... - and across economies developed and developing alike. 

My answer to the question about what comes first, demand or supply would be the following:

If it satisfies a need, demand comes first.

If it is satisfies a want, supply comes first.

This is probably very simplistic, but I think it most cases it will be true. It is also true that as the world develops, certain things that were wants, become needs. I think internet is a good example - at the beginning it was a nice to have, thus it satisfied a want. The suppliers had to market it very well for persons to want to have it. This has now changed - it is a need, and very few persons or businesses will be able to operate effectively without it. 

Now we come to the topic of economic policy. I believe policy should be aimed at satisfying needs, and not wants. Government should supply in the needs of citizens - it is not their job to use tax payer' money to satisfy wants. This is especially true in a developing economy where there is usually inadequate funds and projects have to be prioritized. 

At the very beginning of  economic activity, once the demand comes then the supply will activate on the requirement of the demand. Once the stomach demanded then a man search for food.  

Many thanks colleagues for your comments. 

Yuri, your response also tends towards the evolutionary nature of economic markets. My initial question actually had a bit of anticipation for that because I do not believe that we can artificially cause markets to exist. For example, the invention of internet, did the inventor prepare to affect the world as large as we know internet has come to? Probably no? After which then all these inventions become only inventory until sufficient need for them emerges and they run viral.

Actually we may bring to bear the same issue of evolution of markets in Alessandra's comment. I feel that distributional reasons are a rather complex issue as shown. However, payment for public infrastructure through taxes implies demand and consumption of such infrastructure-I know there is noise in this thesis. Consequently we will have a market as an effect of investing publicly. Clearly the government operates under different rules of the game.

However, I note we have seen investments which are done, especially by government, being completely oblivious of market structures, and have gone on to define the future of societies. Yet could we still continue to uphold the tendency? 

Excellent question, Muthoka.

As the supply and demand aspects are already well-covered and comment on, I will add my .02 to the economic policy and debt allocation/distribution to meet the demand...

Sadly, I feel that in most if not all cases, the economic distribution is skewed by political considerations.  In the US, lobbyists often have more power than lawmakers because the amount of influence they wield results in outcomes that are geared more to political longevity than to actually addressing the needs of the taxpayers who fund these policies.  Dr. Anne Bradley at the Institute of World Politics and Dr. Bradley Coyne from the George Mason University have both done a great deal of work on this topic.  I would encourage to reach out to them to open a dialog about it.

Very Best,

Michelle

Demand comes first and it's followed by the corresponding supplies.

In economic policy, both demand and supply are important. However, the order in which they are prioritized depends on the specific economic situation.

In general, demand is considered more important than supply because it drives economic growth