Thomas A. Gara
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Thomas A. Gara commented on Does supply and demand determine markets? on April 17, 2008, 11:24 PM
So we are talking about Relative Economics and how people respond to the manipulated market place. Relative economic indicators are plentiful but becoming increasingly useless because our perceived needs today are much different, and perhaps frivolous, then before/necessary. Children tell their parents that they NEED an IPod as though it was a survival tool! People need transportation to get supplies, goods to market or themselves to work. But do they need a $50k-100k car to do it, I doubt it.Perceived needs generate the demand that creates the supply for goods and services.Demand does not create supply. Supply creates demand via marketing. Thus, any product can be sold regardless of its intrinsic value. Marketing is the linchpin of the Supply/Demand system. It creates perceived need that generates ample demand for the available supply.It is time to scrap %u201Csupply-side%u201D and %u201Cdemand-side%u201D economic thinking. We are solidly ensconced in %u2018Marketing-side%u2019 economics.