   #copyright

Market

2007 Schools Wikipedia Selection. Related subjects: Business

   A market is a social arrangement that allows buyers and sellers to
   discover information and carry out a voluntary exchange of goods or
   services. It is one of the two key institutions that organize trade,
   along with the right to own property. Allowing markets to arrive at a
   pareto efficient outcome is one of the key components of capitalism.

   In everyday usage, the word "market" may refer to the location where
   goods are traded, sometimes known as a marketplace, or to a street
   market.

Function

   The function of a market requires, at a minimum, that both parties
   expect to become better off as a result of the transaction. Markets
   generally rely on price adjustments to provide information to parties
   engaging in a transaction, so that each may accurately gauge the
   subsequent change of their welfare. In less sophisticated markets, such
   as those involving barter, individual buyers and sellers must engage in
   a more lengthy process of haggling in order to gain the same
   information. Markets are efficient when the price of a good or service
   attracts exactly as much demand as the market can currently supply. The
   chief function of a market, then, is to adjust prices to accommodate
   fluctuations in supply and demand in order to achieve allocative
   efficiency.

   An economic system in which goods and services are exchanged by market
   functions is called a market economy. An alternative economic system in
   which non-market forces (often government mandates) determine prices
   are called planned economies or command economies. The attempt to
   combine socialist ideals with the incentive system of a market is known
   as market socialism.

Types of markets

   Although many markets exist in the traditional sense--such as a flea
   market--there are various other types of them and various
   organizational structures to assist their functions.

   A market can be organized as an auction, as a shopping centre, as a
   complex institution such as a stock market, and as an informal
   discussion between two individuals.

   In economics, a market that runs under laissez-faire policies is a free
   market. It is "free" in the sense that the government makes no attempt
   to intervene through taxes, subsidies, minimum wages, price ceilings,
   etc. Markets may be distorted by a seller or sellers with monopoly
   power, or a buyer with monopsony power. Also, the level of organization
   or negotiation power of buyers, markedly affects the functioning of the
   market. Markets where price negotiations do not arrive at efficient
   outcomes for both sides are said to experience market failure.

   Most markets are regulated by state wide laws and regulations.

   While barter markets exist, most markets use currency or some other
   form of money.

   Markets of varying types can spontaneously arise whenever a party has
   interest in a good or service that some other party can provide. Hence
   there can be a market for cigarettes in correctional facilities,
   another for chewing gum in a playground, and yet another for contracts
   for the future delivery of a commodity. There can be black markets,
   where a good is exchanged illegally and virtual markets, such as eBay
   in which buyers and sellers do not physically interact. There can also
   be markets for goods under a command economy despite pressure to
   repress them.

   Retrieved from " http://en.wikipedia.org/wiki/Market"
   This reference article is mainly selected from the English Wikipedia
   with only minor checks and changes (see www.wikipedia.org for details
   of authors and sources) and is available under the GNU Free
   Documentation License. See also our Disclaimer.
