Adam Smith was not aware of advertising. Suppliers can fabricate demand to manipulate the price. It's not a law, it's an assumption about human psychology and a wrong one.
In the case of Barcelona, supply is limited due to the geography of the area (sea/mountain) and the inner city is already extremely dense.
Really? Try selling pork sausages to Saudi market. There are many failed startups with huge marketing budgets failed, because there were not enough demand for their products.
To disprove supply/demand means that no matter the price of the pickles the number of pickles sold wouldn't change.
The MIT Press had a book in the 90s called "Philosophies of Manufacture" that gathered together writings, pamphlets, letters and more that flowed around as the industrial revolution ramped up in the USA. It is filled with the actual industrialists and/or capitalists fretting about how there would not be enough demand for their products, and openly formulating plans to increase demand via new means (which today we would call advertising and marketing). This is not some idea flowing from progressive politics, it originates with the capital class itself.