An economic theory that built on the foundation laid by the classical school of Adam Smith and David Ricardo. Neo-classical economics, developed in the twentieth century, retained a belief in the value of a free market economy but also developed a theory of prices and markets that did not depend on the classical theory that the value of a good depended on how much labour it incorporated. Neoclassicists argued that price was dependent solely on the forces of supply and demand. See also classical economics.