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# Town Market Function

## Definition

The role of towns as permanent commercial centers where rural inhabitants exchange their rude produce for manufactured goods, creating a continual fair or market that facilitates the division of labour. This function provides both the materials for town manufacturing and the means of subsistence for town inhabitants through reciprocal exchange relationships.

## Source Chapter

Book III, Chapter 1

## Context

Smith identifies this market function as the essential purpose of towns in economic development, explaining how the exchange relationship between town and country creates the conditions for specialization and productivity improvements.

## Economic Domain

Exchange

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