▁definition ▁of ▁the ▁concept ▁ ▁Supp ly ▁and ▁demand ▁Ex cess ▁demand ▁can ▁raise ▁the ▁prices ▁of ▁products ▁trad ed , ▁and ▁excess ▁supply ▁can ▁lower ▁them ; ▁but ▁if ▁supply ▁and ▁demand ▁are ▁relatively ▁bal anced , ▁the ▁question ▁ar ises ▁of ▁what ▁regul ates ▁the ▁settled ▁exchange - r ati os ▁( or ▁average ▁price - level s ) ▁of ▁products ▁trad ed ▁in ▁that ▁case , ▁and ▁this ▁is ▁what ▁the ▁law ▁of ▁value ▁is ▁intended ▁to ▁explain . ▁According ▁to ▁the ▁law ▁of ▁value , ▁the ▁trad ing ▁r ati os ▁of ▁different ▁types ▁of ▁products ▁reflect ▁a ▁real ▁cost ▁structure ▁of ▁production , ▁and ▁this ▁cost ▁structure ▁ultimately ▁reduces ▁to ▁the ▁soci ally ▁average ▁amounts ▁of ▁human ▁labor - time ▁required ▁to ▁produce ▁different ▁goods ▁and ▁services . ▁ ▁Cost ▁structures ▁and ▁price ▁structures ▁Sim ply ▁put , ▁if ▁product ▁A ▁takes ▁ 1 0 0 ▁hours ▁of ▁human ▁work ▁to ▁produce ▁in ▁total , ▁and ▁product ▁B ▁takes ▁ 5 ▁hours ▁to ▁produce , ▁the ▁normal ▁trad ing - rat io ▁of ▁A ▁and ▁B ▁will ▁grav itate ▁to ▁a ▁rate ▁of ▁around ▁ 1 : 2 0 ▁( one ▁of ▁A ▁is ▁worth ▁ 2 0 ▁of ▁B ), ▁because ▁A ▁is ▁worth ▁much ▁more ▁than ▁B . ▁Moreover , ▁if ▁A ▁and ▁B ▁are ▁combined ▁and ▁used ▁up ▁to ▁make ▁product ▁C ▁in ▁ 4 0 ▁hours , ▁then ▁product ▁C ▁is ▁likely ▁to ▁be ▁worth ▁the ▁equivalent ▁of ▁around ▁ 1 4 5 ▁hours