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Demand creates Supply or Supply creates Demand?

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LandJ posted on Sun, Oct 6 2013 1:29 PM

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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Wheylous replied on Thu, Oct 10 2013 10:08 PM

Hey,

If you'd like more input on your questions, feel free to post over at LibertyHQ, where most users have gone:

http://libertyhq.freeforums.org/index.php

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Bill replied on Fri, Oct 11 2013 7:32 PM

Demand creates supply. I've never heard any rational person make a case for supply creates demand. 

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Wheylous replied on Sat, Oct 12 2013 11:58 AM

Excluding Say?

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Bill replied on Sat, Oct 12 2013 7:53 PM

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.

 

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