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  • Here's how it works: the prices

  • we're willing to pay send key

  • signals and Smith used a baker as

  • an example. Hi, this all looks

  • delicious... Could I have a cup of

  • coffee? Yeah, of course. And a

  • scone, please? Thank you.

  • But let's say we all want scones, and

  • the baker keeps running out, well

  • then... she can charge a bit more.

  • Seeing the demand and money to be

  • made, other bakers will start

  • offering scones. All throughout the

  • supply line, people spring into

  • action. Farmers see that bakers are

  • buying wheat so they plant their

  • fields, and up production. Truckers

  • see money to be made in delivering

  • wheat to bakers, so they buy trucks

  • and hire drivers. Thank you.

  • So...we vote with our wallets, and

  • all around the world, people spring

  • into action, to satisfy our

  • demands. No one orders them to do

  • this, but every purchase sends a

  • message. As the supply increases,

  • competition forces prices down.

  • Fewer bakers bake scones and things

  • stabilize as supply meets demand

  • dynamically and automatically.

  • This all happens without government

  • intervention, without any trade

  • commissar dictating quotas. This is

  • Smith's invisible hand at work; it

  • guides large businesses and even a

  • small baker.

Here's how it works: the prices

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B1 US baker supply demand wheat smith invisible

The Invisible Hand - Supply & Demand

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    Mei posted on 2017/08/20
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