One market price coordinates both producers Each on his own Trading at the price Producer A — the buyer (high cost) 4 Price / value (in Y) A’s marginal cost A’s demand A’s gain Produced by A Purchased from B Consumed by A Producer B — the seller (low cost) 4 B’s marginal cost B’s demand B’s gain Produced by B Consumed by B Sold to A P₀ = 4 Cakes per day (X) Cakes per day (X)