Quote:
Originally Posted by Hack&Lube
Supply induced demand is a real thing - that's why construction of more lanes on a highway often leads to further traffic congestion as the increased supply of highway leads more people to take the highway.
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I would not call induced demand on a freeway equivalent to overproduction of a good.
Induced demand on a freeway leads to more houses/lots being built and bought because they are temporarily more desirable due to the lowered commute time. This will eat up capacity on the roads until you're back at square one.
The equivalent would be building a bunch of extra houses somewhere that there is no demand for, so the price falls and people buy them.