This is a part of it indeed. Most people (and even a significant number of economists) assume that the economy is somehow supply-limited (and it doesn't help that most 101 econ class will introduce the markets as a way of managing scarcity), but in reality demand is the limit in 90-ish% of the case.
And when it's not, the supply generally don't increase as much as it could, became supplier expect to be demand-limited again at some point and don't want to invest in overcapacity.
And when it's not, the supply generally don't increase as much as it could, became supplier expect to be demand-limited again at some point and don't want to invest in overcapacity.