Just to be clear, increasing demand implies shifting the demand curve rightward, and increases the price. The dynamics of economies of scale that we are famili

Just to be clear, increasing demand implies shifting the demand curve rightward, and increases the price. The dynamics of economies of scale that we are familiar with are related to chance that suppliers can lower their marginal costs if demand also justifies a fixed cost in suitable technology. And furthermore, if there is a big enough market and enough suppliers, the market price will approach the marginal cost of production. Imagine someone wants you to make a spoon that they'll buy from you. It takes you an hour to whittle one out of a piece of wood, and you charge $100. Then they want ten more using the exact same method you used on the first one. Ten hours whittling sounds like even more of a hardship than an hour, so you charge even more per spoon. A thousands spoons painstakingly whittled? Nope. Now imagine on the other hand, they want you to make them a plastic spoon. Making one plastic spoon is going to be a lot more difficult than whittling one wooden spoon. And yet, if they want enough of them, and you can use any technology, your costs might start to approach $0.01 per spoon. Anyway, since we think of anything that's to become a viable business in terms of how it can scale, it's easy to reverse the outcomes of changes in supply or demand in the base case where no technology or methods are changing.