Hello Katie. I enjoyed your introduction paragraph as a summary to production and consumption. You mentioned that the market is created to shift due to consumers’ needs and wants. We determine what entrepreneurs should create because of our purchasing habits of what we find valuable. I agree that if entrepreneurs lacked consumer behavior knowledge, then the world would not be as successful because the economy would not be able to shift properly for demand. I liked how Bylund explained production in his chapter. He made it easy to understand the role of specialization and how important it is to the economy. It makes sense for us to produce goods that are easiest to us and leave other goods to other people that are better at it. There is no sense for us to use more resources and time than we have to if someone else can do it more efficiently. The quote you used sums up production in the market perfectly.
”In other words, production in a market is in constant flux. It is never stable” (Bylund, 2016, p. 64).
The market is ever changing, and if entrepreneurs do not consistently monitor it, then they will not be able to keep up with consumer demand. The market is not stable, and because of this, we are unable to correctly predict the future of the economy. When demand for a product goes up, prices have to increase in turn to help speed up production. However, when prices for a product go down, prices decrease so that consumers will buy the product. These shifts help entrepreneurs understand their role in the market and how to match consumer demand to stay in business. I like your example of Shein that shows how production affects consumers’ purchasing habits. I recently just discovered this website, and it has changed the way I shop too because I am able to buy more clothes at a cheaper price. This makes me question how they profit from their company, but I agree that it must be the production process behind the company that helps them to produce clothing at a cheaper and faster rate than competitors.
In the next section of your analysis, I agree with your idea of creative destruction. Creative destruction is necessary to keep the economy in motion because change furthers progress which leads to a better future.
”It is what capitalism consists in and what every capitalist concern has got to live in” (Schumpeter, 1962, p. 83).
I like the use of this quote because capitalism needs creative destruction to grow. I wish you would have explained this section a little more, but you grasped the main point Schumpeter was making about creative destruction. The new products that come about in society better how we live so that we can continue to improve and grow, even though it destroys other products in the process. Overall, I enjoyed reading your analysis on the ideas of production and consumption that control how the economy runs.