In our initial analysis of market prices, we assume that buyers and sellers seek goods only for their own personal use. Of course, buyers may also value a good for purposes of exchange, e. g., for speculative ends, or as a medium of exchange. Such activities will be investigated in later subsections, where we shall find that they do not alter the basic direction of the market, but merely enable it to find that direction more efficiently. For the moment, we also assume that personal value scales—and therefore supply and demand schedules—remain stable long enough for a market equilibrium to be established. Finally, we defer discussion of the effects of uncertainty and information flow until later; knowledge of market conditions is presumed here to be readily accessible to buyers and sellers.

If there initially is more than one price for the same good in a market, then buyers, maximizing their value scales, will move away from the seller(s) charging the higher price and flock to the seller(s) offering a lower price. For this reason, the higher-priced seller(s) will need to adjust their prices downward in order to remain in the market; at the new lower price, of course, they may offer a smaller supply. The lower-priced seller(s), meanwhile, will maximize their utilities by raising their prices and migrating from the lower-priced buyers to the higher-priced ones. In short, the bidding process will quickly resolve any price discrepancies, causing the market to settle to a single price ().