---
entity_slug: market_demand_regulation
evaluator: null
evaluated_at: '2026-02-23T05:44:47.347489'
overall_score: 4.6
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly articulates a specific economic mechanism where
    market demand determines production scale and specialization limits. It avoids
    circularity by explaining the causal relationship between demand, employment,
    subsistence, and the maintenance of equilibrium.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This concept is directly grounded in Smith's analysis in Book III, Chapter
    1, where he explicitly discusses how market demand from country areas regulates
    and limits the extent of town-based production and specialization. The entity
    accurately reflects Smith's argument about automatic economic regulation through
    demand mechanisms.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: The "Exchange" domain is perfectly appropriate since this mechanism operates
    through market transactions and the flow of goods between town and country. The
    regulatory function emerges from exchange relationships rather than production
    processes alone.
- name: vsm_relevance
  value: 4.0
  max_value: 5.0
  rationale: This entity maps well to S2 (coordination/anti-oscillation) as it describes
    an automatic regulatory mechanism that prevents economic imbalances between sectors.
    It also has elements of S3 (internal regulation) in its auditing function of maintaining
    equilibrium between production and consumption.
- name: explanatory_value
  value: 5.0
  max_value: 5.0
  rationale: This entity provides significant explanatory power by illuminating how
    market forces automatically regulate economic development and prevent overproduction.
    It reveals a fundamental structural mechanism that Smith uses to explain the self-regulating
    nature of market economies.
---

# Evaluation: Market Demand Regulation

## definition_precision — 4.0 / 5.0

The definition clearly articulates a specific economic mechanism where market demand determines production scale and specialization limits. It avoids circularity by explaining the causal relationship between demand, employment, subsistence, and the maintenance of equilibrium.

## source_grounding — 5.0 / 5.0

This concept is directly grounded in Smith's analysis in Book III, Chapter 1, where he explicitly discusses how market demand from country areas regulates and limits the extent of town-based production and specialization. The entity accurately reflects Smith's argument about automatic economic regulation through demand mechanisms.

## domain_placement — 5.0 / 5.0

The "Exchange" domain is perfectly appropriate since this mechanism operates through market transactions and the flow of goods between town and country. The regulatory function emerges from exchange relationships rather than production processes alone.

## vsm_relevance — 4.0 / 5.0

This entity maps well to S2 (coordination/anti-oscillation) as it describes an automatic regulatory mechanism that prevents economic imbalances between sectors. It also has elements of S3 (internal regulation) in its auditing function of maintaining equilibrium between production and consumption.

## explanatory_value — 5.0 / 5.0

This entity provides significant explanatory power by illuminating how market forces automatically regulate economic development and prevent overproduction. It reveals a fundamental structural mechanism that Smith uses to explain the self-regulating nature of market economies.
