In a monetary economy, supplies of goods and services are derived from demand. Suppliers aim to manage demand through pricing, advertising, offers and availability. In a free market, however, consumer and government demand drives the economic system.
Supply equals demand in accounting terms, but Say’s Law (supply creates its own demand) does not hold. However, supply must necessarily precede demand in time, so that suppliers must anticipate and envision demand in a trial and error process, having profound implications for economics. The supply-demand curves in elementary neoclassical economics are highly misleading and wrong.
“Towards a ‘New Economics’: Values, Resources, Money, Markets, Growth and Politics” – Barker, 2011
Barker, T. (2011) ‘Towards a ‘new economics’: values, resources, money, markets, growth and policy”, in Arestis, P. and Sawyer, M. (eds), New Economics as Mainstream Economics, Palgrave Macmillan. DOI:10.1057/9780230307681_2.