First of all, cities trade with other cities,
provinces trade with other provinces and countries trade with other countries.

How does it work?

Well every city has three levels of wanting a commodity.
1. need
2. demand
3. satisfied

If a city needs a commodity it will buy it nomatter what the price is. Also a city will always consume the number of goods it needs.
If a city demands a good it will only bye it if the price is not too high.
If the city gets satisfied in one type of good it will automatically cancel that traderoute.

Every city will also produce goods. The economic model decides how much of this goods that will go on to the 'provincial market'. For example in a very capitalistic system all the goods that aren't consumed will go to the provincial market. In a very simple economic system maybe just around 40 % of the goods not consumed will go to the provincial market.
The provincial market is the basic economic unit. It's simply a list of all goods to be traded within the province. The prize are determined bye the initial prize and the travelling cost from the selling city to the provincial capitol (this is why capitols get richer than other cities). Every city has the chance of setting up temporary traderouts to get those goods they demand for the lowest prize.

A traderoute is an agreement that holds some information like:
- type of good
- prize
- quantity
- the route on the map

When a troude routs is made the goods will appear in the buying city next turn, unless someone is piracing.

Goods that don't gets sold goes to the next level of trade. The countries market.
This works exactly as the provincial market except now it's all the provinces (and there provincial capitols) that are trading with each other. Goods that still don't get sold here goes yet to the last market place. The global market. This also works just like the other except that there is now only countries that bye and sell goods. The goods will travel between the nearest provincial capitols and that is where the routs will be established.