Why money exists: limits of barter, money is whatever everybody wants, a) lasts b) divisible, use value vs exchange value. Creates probability of market price going to be different than the use value] Natural price: however much it costs to bring something to the market to sell [wages, rents, normal profit] Market price: how much you actually sell it for. When its different from the natural price, people tend to adjust their behavior to make them inline with each other. Law of demand: there is an inverse/direct relationship between the price of a good, and the amount of it buyers are willing to purchase. Higher the price, the more willing a seller will be to sell it. Effectual demand: not only do you want something, but you have the money to pay for it. Demand is higher than supply, then the market price is going to rise.