Defining Demand

Do what they say
Say what they mean
One thing leads to another
--The Fixx

It is often said that "supply follows demand." Seems intuitive. Producers sense demand for a particular good or service and then act appropriately.

However, to engage in trade, production must precede demand. Individuals must produce something of value that can be offered in exchange for goods and services desired. So, seemingly, "demand follows supply."

Seemingly, demand has to be defined more precisely to rectify these two positions. Demand can be seen as 'want.' Because human desires are axiomatically insatiable, demand in this sense is pervasive, which gives credence to the "supply follows demand" aphorism. Suppliers need to determine what demands rest on top of consumers' buying lists.

Demand in the "demand follows supply" sense reflects more of a 'readiness for trade.' To be ready for trade, a prerequisite--production--is necessary in order to create a tradable position.