In the competitive market system, rational, utility-maximising consumers interact with rational profit-maximising producers. Yet consumers are both buyers and suppliers – they buy (demand) goods and services and they supply labour to firms. Similarly, firms both consume (demand) other firms’ products (capital machinery and raw materials) and supply goods and services to consumers. Firms also demand labour – there is a labour demand and supply curve which we explore further in a later section on the Labour Market. Sometimes the market mechanism fails to generate demand or supply signals that reflect what society wants or needs – and market failure is a key section of our course.