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# Market Price Adjustment

## Definition

The process by which prices are determined through the higgling and bargaining of the market, adjusting according to supply, demand, and the relative difficulty of different types of labour.

## Source Chapter

Book I, Chapter 5

## Context

Smith describes this as the mechanism by which the market settles on prices that, while not perfectly accurate, are sufficient for carrying on the business of common life.

## Economic Domain

Exchange

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