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# Market Price Mechanism Regulation

# Definition

The natural process by which market prices adjust to balance supply and demand through the independent actions of buyers and sellers, which Smith argues is disrupted by government interventions designed to manipulate prices for particular interests.

## Source Chapter

Book IV, Chapter 3

## Context

Smith demonstrates how mercantilist policies interfere with natural price mechanisms, leading to inefficiencies and reduced economic welfare, while arguing that free markets naturally regulate prices more effectively than government intervention.

## Economic Domain

Exchange

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