When the demand for a specific commodity is completely backed up by a supply of another commodity, which can be exchanged for the first, there is efficient market demand; and when the supply of a certain commodity is fully backed up by the demand for a commodity, which can be taken in exchange for the supplied, there is efficient market demand. Supply of an economic good is for the sake of the value of another good, and demand for a deficient good is upheld with the value of another good. Market supply and market demand provoke each other and proliferate together according to the principle of economic efficiency.
Historical Backdrop
• ADAM SMITH The Wealth of Nations: effectual demand.
• JOHN CAIRNES Some Leading Principles of Political Economy: reciprocal demand.
• JOHN STUART MILL Principles of Political Economy: the law of reciprocal demand.
• JOHN COMMONS Legal Foundations of Capitalism: the supplies and demands as limiting factor.
• LEON WALRAS Elements of Pure Economics: effective demand for and effective offer of commodities.