Does consumption drive production or does production drive consumption? Let us find out. A good produced will have demand for consumption at a price somewhere between zero and infinity. Regardless of what good is produced there will be consumption demand for it at some price within this price range. Demand to consume is infinite. If a good is produced there will always be a scenario where it will have demand for consumption. A good demanded by consumers will be demanded at some maximum price. If the cost of producing a good is above that maximum price demanded by the consumer it will not be produced. Capacity to produce is finite. Even if a good is demanded by consumers there is a scenario where that good will not be produced. Conclusion: demand to consume is infinite while capacity to produce is finite. If production occurs consumption is always possible. If production does not occur consumption is not always possible. Consumption does not drive production, production drives consumption.
Posted on: Sat, 26 Oct 2013 04:46:09 +0000
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