785 B
785 B
Market Price Regulation Mechanism
Definition
The economic process where the quantity of finished work sold to country inhabitants regulates the materials and provisions purchased by town inhabitants, creating a balanced exchange system. This mechanism ensures that neither employment nor subsistence can increase beyond what the demand from the country will support.
Source Chapter
Book III, Chapter 1
Context
Smith presents this as the automatic regulator of town-country commerce, explaining how market forces maintain equilibrium between production and consumption in the reciprocal exchange relationship.
Economic Domain
Exchange