Market (economics)

In <a href="/facts/Economics/HYctA2Dn">economics</a>, a market is a composition of <a href="/facts/System/hmqQ4ASX">systems</a>, <a href="/facts/Institution/kGkhGcMN">institutions</a>, procedures, <a href="/facts/Social_relation/DU3HW2Ah">social relations</a> or <a href="/facts/Infrastructure/QJvbsSpl">infrastructures</a> whereby parties engage in <a href="/facts/Exchange_(economics)/d56S7haK">exchange</a>. While parties may exchange goods and services by <a href="/facts/Barter/vBDyXcd9">barter</a>, most markets rely on sellers offering their goods or services (including <a href="/facts/Labour_power/VduRHmg0">labour power</a>) to buyers in exchange for <a href="/facts/Money/3BYGU6C8">money</a>. It can be said that a market is the process by which the value of goods and services are established. Markets facilitate <a href="/facts/Trade/S13U8JKr">trade</a> and enable the distribution and <a href="/facts/Allocation_of_resources/QmQWt2Yg">allocation of resources</a> in a society. Markets allow any tradeable item to be evaluated and <a href="/facts/Price/yWQ8edfN">priced</a>. A market <a href="/facts/Emergence/zlFRW0oj">emerges</a> more or less <a href="/facts/Spontaneous_order/kVqnqDwd">spontaneously</a> or may be constructed deliberately by human interaction in order to enable the exchange of rights (cf. <a href="/facts/Ownership/dI4oAYoD">ownership</a>) of services and goods. Markets generally supplant <a href="/facts/Gift_economy/lFp9Y2GU">gift economies</a> and are often held in place through rules and customs, such as a booth fee, competitive pricing, and source of goods for sale (local produce or stock registration).
Markets can differ by products (goods, services) or factors (labour and capital) sold, <a href="/facts/Product_differentiation/BGeUHFCL">product differentiation</a>, place in which exchanges are carried, buyers targeted, duration, selling process, government regulation, taxes, subsidies, <a href="/facts/Minimum_wage/KhbtVClf">minimum wages</a>, <a href="/facts/Price_ceiling/XIo0BlU2">price ceilings</a>, legality of exchange, liquidity, intensity of speculation, size, concentration, exchange asymmetry, <a href="/facts/Relative_price/FU7GKpjd">relative prices</a>, volatility and geographic extension. The geographic boundaries of a market may vary considerably, for example the food market in a single building, the real estate market in a local city, the consumer market in an entire country, or the economy of an international <a href="/facts/Trade_bloc/8gVxDTJK">trade bloc</a> where the same rules apply throughout. Markets can also be worldwide, see for example the global <a href="/facts/Diamond_trade/IBUdnd1y">diamond trade</a>. National economies can also be classified as <a href="/facts/Developed_market/8eLxMIvK">developed markets</a> or <a href="/facts/Developing_market/eTfS4kxl">developing markets</a>.
In <a href="/facts/Mainstream_economics/TF7cnxsE">mainstream economics</a>, the concept of a market is any structure that allows buyers and sellers to exchange any type of goods, services and <a href="/facts/Information_economy/uvmd3qhx">information</a>. The exchange of goods or services, with or without <a href="/facts/Money/3BYGU6C8">money</a>, is a <a href="/facts/Financial_transaction/boHRc8mw">transaction</a>. Market participants or <a href="/facts/Agent_(economics)/9dTPUnFk">economic agents</a> consist of all the buyers and sellers of a <a href="/facts/Goods/AtK6gQh2">good</a> who influence its <a href="/facts/Price/yWQ8edfN">price</a>, which is a major topic of study of <a href="/facts/Economic/okLWSsEY">economics</a> and has given rise to several theories and <a href="/facts/Economic_models/gNM1Tuct">models</a> concerning the basic market forces of <a href="/facts/Supply_and_demand/KprL1fvc">supply and demand</a>. A major topic of debate is how much a given market can be considered to be a "<a href="/facts/Free_market/KnK7JohY">free market</a>", that is free from <a href="/facts/Economic_interventionism/ogcBsRWI">government intervention</a>. Microeconomics traditionally focuses on the study of market structure and the efficiency of <a href="/facts/Market_equilibrium/lFTmEyUS">market equilibrium</a>; when the latter (if it exists) is not efficient, then economists say that a <a href="/facts/Market_failure/S8CGBAPk">market failure</a> has occurred. However, it is not always clear how the allocation of resources can be improved since there is always the possibility of <a href="/facts/Government_failure/mEcETjKf">government failure</a>.

Market (economics) open-in-new

Market (economics)