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# Higgling and Bargaining of the Market

## Definition

The process of negotiation and price discovery through which market participants adjust prices based on their perceptions of value, difficulty of production, and relative scarcity.

## Source Chapter

Book I, Chapter 5

## Context

Smith uses this phrase to describe how the market, through its natural processes of negotiation, arrives at prices that reflect the relative value of different commodities.

## Economic Domain

Exchange

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