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  • Essay / Classical Economic Theory - 1668

    The theory that stands out the most is that supply creates its own demand. I can relate to this theory because I had purchased a car two years ago and was put in a situation where my demand was significantly high. Later, I realized that I could have bought my car cheaper. But the lack of supply for this particular car and its features has made demand critically important. In this case, I wanted to buy a car, at the same price that many others want to buy a car. But the dealer may not want to produce or import as many cars as we wanted. As a result, our frustration can build up and lead us to make an irrational bad decision