Since I am new in free market economics, I do not understand something. Others claim that Demand creates Supply (Keynsians or am I wrong?), while Austrian economics say that Supply creates Demand*.
Can someone explain this to me, please?
If Demand creates Supply is wrong? If so, why? Let's say for example, there is an entrepreneur who understood that increasing muslim population lead to increasing demand for burgas. Then, he opens a small factory to produce and sell burgas. This is a scenario that could happen in real world. Isn't this a proof that indeed Demand creates Supply?
And apart from the above, in a free market consumers are the "kings". They decide what will be produced, when, how, in what quality and quantity etc. Doesn't this illustrate the "Demand creates Supply" viewpoint?
*If I am wrong about the Austrian position in this, please inform me.
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Demand creates supply. I've never heard any rational person make a case for supply creates demand.
No not including Say.
Guess I didn't see that point. My point was like in "Field of Dreams" If you build it they will come. The Chineses have disproved that theory with the ghost towns they've been building for the last 5 years.