The concept of the market is quite multifaceted. It cannot be given an unambiguous definition. On the one hand, the market is a collection of individual consumers that determine consumer demand, which is formed as a result of the combination of many factors: economic, demographic, and social.
Instructions
Step 1
In a broader sense, the market is a sphere of the economy in which there is a continuous process of commodity circulation. A commodity is converted into money, and money, in turn, is again exchanged for a commodity. The market is also a set of goods that are produced in various sectors of the economy. In a broader sense, the market is a system of economic relations arising in the process of production, distribution and circulation of goods, as well as the movement of money. Market relations are characterized by freedom in the actions of sellers and buyers, in setting prices, in the formation and use of resources.
Step 2
Economists use the term market to mean any industry where buyers and sellers interact on a free price basis. The main elements of the market are supply, demand and price. Its successful functioning requires competition, free pricing and the presence of private property.
Step 3
The market provides some important functions. First, it realizes the relationship between production and consumption. The market directs the manufacturer to release only those products in which the consumer is interested. If a manufacturer produces products that are not in demand, then he will inevitably collapse. Second, the market encourages efficient production. Those. a manufacturer should not only produce a product, but also try to reduce the cost of manufacturing it. Then, with the same price for the product, he will be able to get more profit.
Step 4
The market differentiates manufacturers. He is focused on a strong seller, provides him with the most rare resources. Weak manufacturers are not able to take their rightful place, they, as a rule, do not stay on the market for long. The market is successfully operated by those sellers who are able to withstand the competition, improving the quality of their products and reducing the cost of manufacturing them.
Step 5
Thanks to the market, the quality of the products is growing. Products that do not meet society's requirements will not be purchased. In this case, the manufacturer will not only not make a profit, but also will not cover his costs.
