Market: general economic sense

Market: general economic sense

Market, in its general economic sense, a group of buyers and sellers who are in sufficiently close contact for the transactions between any pair of them to affect the terms on which the others buy or sell. Ultimately, every transaction in any commodity or service affects and is affected by every other. A market therefore sometimes indicates in a general way large groups of buyers and sellers of wide classes of goods, e.g., the consumer goods market, the factor (of production) market, the capital market. These broad market categories are helpful when considering the working of the economy as a whole. In the consumer goods market, the quantities and prices of final goods may be seen to be determined by the responsiveness of demand to prices and incomes, and of supply to prices via costs of production. Costs of production depend upon the quantities of factors used and their prices, which are in turn determined by supply and demand in the factor (e.g. labour) market These factor prices (wages , interest, etc.), together with the distribution of ownership of resources, determine incomes. Income which is not spent in the market for consumer goods is available (directly or indirectly) for the capita' market, and the terms on which savings can be borrowed in the capital market influence methods of production and costs.

This is the general sense of 'market'. The market in a single commodity or class of commodity means the group of buyers buying at the ruling price and potential buyers who would buy at lower prices, and of sellers and potential sellers. Here emphasis is usually laid on producers and ultimate consumers rather than on the wholesale and retail channels by which they are linked. As in the general sense of 'market', the market of a single commodity does not imply a particular geographical location. Transactions in some goods are centralized, e.g. securities on the Stock Exchange, copper, tin, lead and zinc on the Metal Exchange, tramp shipping on the Baltic Exchange, fruit in Smithfield market, diamonds in Hatton Garden; but their members act for suppliers and buyers who although fat from one another physically are part of the market.

Further readingEconomic Calendar - Economic Data Calendar

Since then his writings have in turn been increasingly reinterpreted as a special case both by some followers and by some economists who had not wholly accepted his writings. The content of economics is in a state of change, and this site is therefore not a final statement of economic doctrine.

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