Hardiwinoto.com-We need to be able to predict the consequences of alternative policies, and events that may be outside our controle. The tool we use to make such predictions is called a theory. A theory is of no use if its predictions are inaccurate. The theory of demand and supply is a example of an economic theory. It can be used to make predictions about the price and quantity of some commodity. In a free market economy, most economic decisions are guided by prices. Therefore, without a reliable theory of prices, you will get no where in economic analysis. click theory and prediction (demand and suply)