Demand Efficiency and Inefficiency
The quantity and quality of demand addressed by suppliers from the perspective of demand shows the demand efficiency of a supereconomic system.
| Nominal Value Realized | Real Value Realized | Name |
|---|---|---|
| Increase | Stable | Demand Efficiency |
| Decrease | Stable | Demand Inefficiency |
Demand Efficiency is when there is a match of suppliers to demanders from the demand side. Demand Inefficiency is when there is a mismatch.
Most people have a specific need.
For example, let’s say you need a specific a spare part that fits a machine. Normally, a person would go to a hardwarre store to look for that part.
Some stores might have it, some might not. Asume there are 3 stores:
| Store | Availability of Speific Spare Part | Distance from Buyer |
|---|---|---|
| A | none | Near |
| B | 2 spare parts, too expensive | Moderate |
| C | 3 spare parts, 1 is ideal for price point and specs | Far |
The spare part is in Store C which is farthest. It is the business organization that has the real value to address the nominal value you assign to the spare part.
- Maximum demand efficiency is you going to Store C directly to get that part or having it delivered to you
- Maximum demand inefficiency is you going to through Store A, then Store B, then Store C before actually finding the part that is ideal for your need (nominal value) and budget (real value).
Therefore, we can say that:
- demand efficiency is when demand is satisfied at the least cost or real value to society
- demand inefficiency is when demand is not satisfied or is satisfied in a costly way
Increased demand efficiency allows more nominal value to be realized and so leads to an increase of real wealth.
This will be revealed by the supereconomic ratios.