While teaching at the Lausanne Academy, Walras began constructing a mathematical model that assumes a “regime of perfectly free competition”, in which productive factors, products, and prices automatically adjust in equilibrium. Walras began with the theory of exchange in 1873 and then he proceeded to map out his theories of production, capitalization and money in his first edition. His theory of exchange began with an expansion of Cournot's demand curve to include more than two commodities, also realizing the value of the quantity sold must equal the quantity purchased thus the ratio of prices must be equal to the inverse ratio of quantities. Walras then drew a supply curve from the demand curve and set equilibrium prices at the intersection. His model could now determine prices of commodities but only the relative price. In order to deduce the absolute price, Walras could choose one price to serve as a unit of account, coined by Walras as the numeraire and state all other prices in units of this commodity. The term numeraire, meaning unit of account, has become part of the international vocabulary of economics and for many economists, the only French word they know. Using this numeraire he determined that marginal utility, or rarete, divided by the price must be equal for all commodities. Walras felt that because the value of what an individual consumer consumes is equal to the value of that individual's stock of goods, that the aggregate, the value of total sales must equal the value of total purchase, must hold true. This became known as Walras’ Law which held that equilibrium equations can be derived from the others until only m-1 equations in the m-1 relative prices remain. Walras then expanded the theory to include production with the assumption of an existence of fixed coefficients in said production making possible a generalization that the marginal productivity of the factors of production varied with the amount of input, making factor substitution possible.