ABSTRACT
While selling land services and selling labour take place in the form of renting land or hiring workers as such, selling profit takes place by hiring capital in the form of money. Consequently, there is a certain current price for renting money capital, the rate of interest. In a second market, which we call the products market, the entrepreneurs on one hand meet the landowners, workers and capitalists on the other; the former as suppliers and the latter as demanders of products. A price in the numéraire is called for every kind of product. If the quantity effectively demanded at this price is higher than the quantity effectively offered, landowners, workers and capitalists raise their bids. If the quantity effectively offered is higher than the quantity effectively demanded the entrepreneurs underbid. The current price is always where effective supply and effective demand are equal.
