Lesson 3 Lesson 3: Supply & Demand
Presented by: Dr. Tawni Ferrarini
Northern Michigan University
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.
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.
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