Lesson 3: Supply & Demand | Intercollegiate Studies Institute

Lesson 3 Lesson 3: Supply & Demand

Presented by: Dr. Tawni Ferrarini
Northern Michigan University

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Coordination via Markets: Demand and Supply

In a market economy, who is looking out for the good of society as a whole? Well, no one. Despite this apparent negligence, however, market economies have proven remarkably successful in promoting overall well-being. Supply and demand are key to understanding why. The following lesson describes how the behavior of people interacting in competitive markets is coordinated for the good of buyers and sellers.

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The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society's legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed. I, Pencil, seemingly simple though I am, offer the miracle of my creation as testimony that this is a practical faith, as practical as the sun, the rain, a cedar tree, the good earth.

Leonard Read