--- ENTITY: natural price of commodities ---

# Natural Price of Commodities

## Definition

The price of a commodity that exactly covers the rent of land, wages of labour, and profits of stock required to bring it to market, representing the central or equilibrium price toward which market prices continually gravitate.

## Source Chapter

Book I, Chapter 7

## Context

The central concept of this chapter, introduced as the price that "leaves him this profit" and is "the lowest at which he is likely to sell them for any considerable time" under conditions of perfect liberty.

## Economic Domain

Exchange

---
--- ENTITY: market price of commodities ---

# Market Price of Commodities

## Definition

The actual price at which any commodity is commonly sold, which may be above, below, or exactly the same as its natural price, determined by the proportion between quantity brought to market and the effectual demand.

## Source Chapter

Book I, Chapter 7

## Context

Distinguished from natural price as the "actual price at which any commodity is commonly sold," with its fluctuations explained through the dynamics of supply and demand.

## Economic Domain

Exchange

---
--- ENTITY: effectual demand ---

# Effectual Demand

## Definition

The demand of those willing and able to pay the whole value of rent, labour, and profit required to bring a commodity to market, sufficient to effectuate its bringing to market, as distinguished from mere desire or absolute demand.

## Source Chapter

Book I, Chapter 7

## Context

Introduced as the key determinant of market price, contrasting with "absolute demand" through the example of a poor man's desire for a coach and six.

## Economic Domain

Exchange

---
--- ENTITY: ordinary rates of wages, profit, and rent ---

# Ordinary Rates of Wages, Profit, and Rent

## Definition

The average or typical rates of wages, profit, and rent that prevail in a society or neighbourhood, regulated partly by general circumstances of the society and partly by the particular nature of each employment.

## Source Chapter

Book I, Chapter 7

## Context

Presented as the foundation for understanding natural prices, with these ordinary rates being "naturally regulated" by both societal conditions and employment-specific factors.

## Economic Domain

Distribution

---
--- ENTITY: natural rates of wages, profit, and rent ---

# Natural Rates of Wages, Profit, and Rent

## Definition

The ordinary or average rates of wages, profit, and rent at a particular time and place, which serve as the component parts of natural price for commodities.

## Source Chapter

Book I, Chapter 7

## Context

Defined as the rates that "may be called the natural rates of wages, profit and rent, at the time and place in which they commonly prevail."

## Economic Domain

Distribution

---
--- ENTITY: component parts of price ---

# Component Parts of Price

## Definition

The three elements that constitute the price of any commodity: rent of land, wages of labour, and profits of stock, which must be paid to bring the commodity to market.

## Source Chapter

Book I, Chapter 7

## Context

Identified as the "rent of the land, the wages of the labour, and the profits of the stock" that together determine whether a commodity is sold at its natural price.

## Economic Domain

Distribution

---
--- ENTITY: prime cost of commodities ---

# Prime Cost of Commodities

## Definition

The cost of production excluding the profit of the person who sells the commodity again, though in economic analysis this profit must be included for the seller to avoid loss.

## Source Chapter

Book I, Chapter 7

## Context

Distinguished from natural price through the observation that "what is called the prime cost of any commodity does not comprehend the profit of the person who is to sell it again."

## Economic Domain

Production

---
--- ENTITY: subsistence of the dealer ---

# Subsistence of the Dealer

## Definition

The dealer's own maintenance and livelihood, which must be provided for through the profit from selling goods, just as the dealer advances wages to workmen during production.

## Source Chapter

Book I, Chapter 7

## Context

Explained through the analogy that "as, while he is preparing and bringing the goods to market, he advances to his workmen their wages, or their subsistence; so he advances to himself, in the same manner, his own subsistence."

## Economic Domain

Distribution

---
--- ENTITY: perfect liberty in trade ---

# Perfect Liberty in Trade

## Definition

The condition where a dealer may change his trade as often as he pleases, allowing market prices to gravitate toward natural prices without artificial restrictions.

## Source Chapter

Book I, Chapter 7

## Context

Mentioned as the condition under which "the lowest at which he is likely to sell them for any considerable time" is the natural price.

## Economic Domain

Regulation

---
--- ENTITY: overstocked market conditions ---

# Overstocked Market Conditions

# Understocked Market Conditions ---

# Understocked Market Conditions

## Definition

Market situations where the quantity of a commodity brought to market exceeds (overstocked) or falls short of (understocked) the effectual demand, causing prices to fall below or rise above natural prices respectively.

## Source Chapter

Book I, Chapter 7

## Context

Described through the dynamics of how excess supply forces prices down while insufficient supply drives prices up through competition among buyers.

## Economic Domain

Exchange

---
--- ENTITY: competition among dealers ---

# Competition Among Dealers

## Definition

The rivalry between different sellers that obliges them to accept the market price but does not oblige them to accept less, helping to regulate prices toward natural levels.

## Source Chapter

Book I, Chapter 7

## Context

Identified as the force that "obliges them all to accept of this price, but does not oblige them to accept of less" when market price equals natural price.

## Economic Domain

Exchange

---
--- ENTITY: competition among buyers ---

# Competition Among Buyers

## Definition

The rivalry between purchasers when quantity falls short of effectual demand, causing market prices to rise above natural prices as buyers compete to secure limited supply.

## Source Chapter

Book I, Chapter 7

## Context

Described as the mechanism that "will immediately begin among them, and the market price will rise more or less above the natural price" when supply is insufficient.

## Economic Domain

Exchange

---
--- ENTITY: competition among sellers ---

# Competition Among Sellers

## Definition

The rivalry between suppliers when quantity exceeds effectual demand, causing market prices to fall below natural prices as sellers compete to dispose of excess inventory.

## Source Chapter

Book I, Chapter 7

## Context

Identified as the force that "increases more or less the competition of the sellers" when supply exceeds demand, reducing market prices.

## Economic Domain

Exchange

---
--- ENTITY: natural price as central price ---

# Natural Price as Central Price

## Definition

The concept of natural price as the equilibrium or central point toward which market prices continually gravitate, though occasionally suspended above or forced below by various accidents or regulations.

## Source Chapter

Book I, Chapter 7

## Context

Explicitly described as "the central price, to which the prices of all commodities are continually gravitating."

## Economic Domain

Exchange

---
--- ENTITY: annual industry employed in production ---

# Annual Industry Employed in Production

## Definition

The total quantity of industry annually employed to bring any commodity to market, which naturally suits itself to the effectual demand through market mechanisms.

## Source Chapter

Book I, Chapter 7

## Context

Described as naturally aiming "at bringing always that precise quantity thither which may be sufficient to supply, and no more than supply, that demand."

## Economic Domain

Production

---
--- ENTITY: species of industry with variable output ---

# Species of Industry with Variable Output

## Definition

Productive activities where the same quantity of industry produces different quantities of commodities in different years, such as agriculture producing varying amounts of corn, wine, oil, and hops.

## Source Chapter

Book I, Chapter 7

## Context

Contrasted with industries producing consistent output, explaining why agricultural prices fluctuate more than manufactured goods.

## Economic Domain

Production

---
--- ENTITY: species of industry with consistent output ---

# Species of Industry with Consistent Output

## Definition

Productive activities where the same quantity of industry produces the same or very nearly the same quantity of commodities each year, such as spinning or weaving producing consistent amounts of linen and woollen cloth.

## Source Chapter

Book I, Chapter 7

## Context

Contrasted with agriculture to explain why manufactured goods have more stable prices than agricultural products.

## Economic Domain

Production

---
--- ENTITY: occasional and temporary market fluctuations ---

# Occasional and Temporary Market Fluctuations

## Definition

Short-term variations in market prices that primarily affect the wages and profit components of price, while having less impact on rent, which is more stable in both rate and value.

## Source Chapter

Book I, Chapter 7

## Context

Distinguished from permanent deviations, with the observation that "the occasional and temporary fluctuations in the market price of any commodity fall chiefly upon those parts of its price which resolve themselves into wages and profit."

## Economic Domain

Exchange

---
--- ENTITY: permanent market price enhancements ---

# Permanent Market Price Enhancements

## Definition

Sustained increases in market price above natural price caused by natural causes (such as unique soil conditions) or artificial regulations (such as monopolies), which can last for many years or even centuries.

## Source Chapter

Book I, Chapter 7

## Context

Distinguished from temporary fluctuations, with examples including monopolies and unique natural productions that command premium prices.

## Economic Domain

Regulation

---
--- ENTITY: monopoly effects on market price ---

# Monopoly Effects on Market Price

## Definition

The ability of monopolists to keep markets understocked and sell commodities above natural price by never fully supplying effectual demand, thereby raising wages and profits above natural rates.

## Source Chapter

Book I, Chapter 7

## Context

Compared to trade secrets, with the observation that "the monopolists, by keeping the market constantly understocked by never fully supplying the effectual demand, sell their commodities much above the natural price."

## Economic Domain

Regulation

---
--- ENTITY: corporation privileges and market prices ---

# Corporation Privileges and Market Prices

## Definition

The exclusive privileges granted to corporations and similar regulations that restrain competition to a smaller number than might otherwise enter an employment, having the same tendency as monopolies to keep market prices above natural prices.

## Source Chapter

Book I, Chapter 7

## Context

Described as "a sort of enlarged monopolies" that can "keep up the market price of particular commodities above the natural price, and maintain both the wages of the labour and the profits of the stock employed about them somewhat above their natural rate."

## Economic Domain

Regulation

---
--- ENTITY: statutes of apprenticeship effects ---

# Statutes of Apprenticeship Effects

## Definition

Laws that, when a manufacture is prosperous, enable workers to raise wages above natural rates, but when the trade decays, may force wages below natural rates by excluding workers from alternative employments.

## Source Chapter

Book I, Chapter 7

## Context

Described as having a more durable effect in raising wages above natural rates than in reducing them below, with the latter effect lasting only as long as the lives of workers trained during prosperity.

## Economic Domain

Regulation

---
--- ENTITY: religious occupational restrictions ---

# Religious Occupational Restrictions

## Definition

Cultural or religious principles that bind individuals to follow their father's occupation, as in ancient Egypt, preventing wage or profit rates from falling below natural rates for extended periods.

## Source Chapter

Book I, Chapter 7

## Context

Cited as an example of the extreme policy needed to permanently depress wages or profits below natural rates across multiple generations.

## Economic Domain

Regulation