that money is finely divisible allows an accurate money measure of the
value of the piano. The owner of the piano, if he is satisfied with
the amount of money offered, does not hesitate to accept the farmer's
money, since he, too, realizes that he can use the money to purchase
the things that he in turn desires.

81. VALUE AND PRICE.--We have used the term "value" several times; as
part of our preparation for the study of the great problem of
industrial reform, we must understand precisely what is meant by the
term.

Suppose, for the sake of clearness, that we speak of a market as a
definite place where goods are bought and sold. Individuals take or
send their surplus products to the market for sale; individuals
desiring to buy commodities likewise resort to the market. In the
market commodities are said to have value, that is to say, they have
power in exchange. The power of a commodity in exchange is measured in
money, and the amount of money for which a commodity will exchange is
called its price. Price is thus a measure, in terms of money, of the
value of a commodity.

The value of a commodity in the market is dependent, partly upon its
utility, or want-satisfying power; and partly upon its scarcity. In
other words, the value of a commodity depends partly upon the
intensity with which it is desired by persons able and willing to
purchase it, and partly upon its available supply. Price is set as the
result of the interaction of the forces of supply and demand, this
interaction commonly taking the form of a bargaining process between
prospective sellers and prospective buyers.